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 they have 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 disastrous mini-budget last year.
And that many of the annuity providers are being caught out by the surge in volumes.
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.”
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 was contacted for comment but has yet to respond when this article went to press.
