Financial advisers have railed against insurance companies after they faced difficulties arranging annuities for their clients due to poor service and long delays.
Aviva, Canada Life, L&G are some of the household insurers whose annuity service standards were found wanting.
“I’m buying annuities for three clients and I’m finding the service standards from annuity providers and insurance companies just horrific at the moment,” an adviser told Money Marketing.
“For two months now I’ve been phoning Aviva every week and they keep saying they are doing a manual calculation of the transfer value. They should have dealt with it within 10 days of receiving the request.
“There’s another case with Canada Life where they told me it’s four weeks for them to deal with a query about annuities. Just finding the delays are having a big impact on clients.”
The adviser said their client who recently retired and has no income is being put in financial limbo due to the transfer delay.
They added: “The client wants to buy annuity with Canada Life. The funds were requested from Aviva two months ago and Aviva has spent two months telling me they are doing a manual calculation of the transfer value.
“I’m phoning them every week sometimes twice a week. And they just keep telling me the same thing that they are doing manual calculation and can’t give me any more information.
“Once we get the transfer value then they can transfer the funds to the annuity provider. So, it’s Aviva who are transferring the money across and they are the ones who are taking two months to manually calculate the transfer value.”
The adviser said they lodged a complaint to Aviva six weeks ago, but the company has not done anything yet to resolve the matter.
Other advisers have taken to social media to express similar frustrations against annuity providers.
“[I’m] having a headache as we speak with a case that’s dragging on. It’s like stepping back into the dark ages with some of these firms,” an adviser said.
“Absolute shocking experience and process. Couple of emails from yesterday when a colleague chased the transfer of funds. Hang your heads in shame life companies,” another added.
“I have two in progress. Not moving fast. Clueless staff in the providers. All a big headache and a hell of a lot of work,” yet another said.
Money Marketing understands this is a sector-wide problem as demand for annuities rose following Liz Truss’s mini-budget last year, which caused chaos in the markets.
Many annuity providers are thought to have been caught out by the surge.
In May, research by Aegon and NextWealth found that annuities are making a comeback among retired clients.
It found that 24% of advisers said they had recommended annuities and 50% of those recommended annuities more than they did a year ago.
Billy Burrows, annuity expert and adviser with Eadon & Co, said annuities have become the product of choice for many advisers and their clients because the income for annuities has increased substantially.
He noted that despite the surge in interest the service standards of life companies have been “shocking”.
“But in their defence, they scaled down their annuity teams after pension freedoms and found it difficult to scale up when annuity rates and volumes increased last year,” Burrows said.
Money Marketing contacted both Aviva and Canada Life for comment.
Nick Flynn, retirement income director, Canada Life said: “Following the significant improvement in annuity rates, we are experiencing unprecedented demand for our products, with manual quote activity up over 50% and sales volumes following a similar trend.
“Recognising this level of business activity is now the norm and will continue to grow, we have already taken steps to improve our service levels to provide the customer service both our customers and advisers expect. This will take time to have a significant impact on dealing with the volumes of manual quotes, but we are treating this as our priority.
“All advisers can get enhanced annuity quotations via the many portals instantly, however on very complex medical conditions we appreciate that asking the provider for a manual quote is appealing.”
An Aviva spokesperson added: “Following increases in long term returns, we have seen significant demand for annuity quotes and applications. We have taken action to support this increased activity and protect service levels.”
L&G has been contacted for comment but is yet to respond.
Some years ago I raised a formal complaint against Canada Life for having screwed up an annuity application and they admitted having done do but refused to pay us any compensation on the grounds that the commission would cover it.
On another case, L&G simply lied repeatedly about not having received the money from the ceding provider, even though the ceding provider confirmed unequivocally that the payment had cleared. Typical L&G.
How can this be correct, 2 weeks to go before consumer duty and companies are delivering very poor service, surely not.
6 weeks ago I sent an enhanced annuity quote request to Canada Life and still waiting.
Good to see the industry is taking consumer duty seriously, lets hope the FCA is taking note and starts to do something about all the providers delivering very poor service standards.
The poor service is not just related to annuities, but includes most other products too.
Some are having to wait for months for their first pension payment after retiring.
Where is regulator? It talks a great game about Consumer Duty and Value for Money…but is not prepared to do anything about it.