According to many IFA’s, and certainly by the look of our recent article about how one client claimed it took him two years to get his annuity transferred, many insurance companies regularly go over the time limits and with no comeback on them they are unlikely to change.
Now, they are calling for the Financial Services Authority (FSA) to investigate.
According to the Association of British Insurers, it should take no more than two weeks to sort out the paperwork and transfer the annuity, however, one senior IFA, James Jones-Tinsley, an adviser for Pearson Jones PLC said:
“The providers could easily do it far quicker, but I have had clients and known colleagues who have had clients who end up waiting four or five weeks. The best thing to do is fine them for not transferring money in a reasonable period of time and it is something that has to be cracked. Customers want to transfer because they are offering such poor annuity rates, but the providers are taking an age and customers are being put off by this. One point is that every annuity provider has their own forms set out in a different way, even though they are supposed to be working towards the same end. There is no reason whatsoever why they cannot get together round a table and come up with a single form betweeen them. That would go some way towards making the process less bureaucratic and quicker.”
He believes that they are deliberately making the process long-winded to put customers off shopping around. The ABI has now said that where there is a delay, the insurance companies should be paying interest to the consumer, however, they are only an advisory body, not regulatory, so can only give guidelines.
The regulatory body is the FSA, who have said:
“Once a customer has opted for a transfer then our rules do require it to be done speedily and in a timely fashion. If there is a firm who we have identified an issue with, that is not following that requirement, then that is something that we would look into and take action with accordingly.”
We’d like to hear more from those consumers who are finding it is taking some time and believe IFA’s should be highlighting any issues to the FSA. Until there is an investigation, the insurance companies are getting away with it.
