Increasing consumer engagement is crucial to improving retirement income choices – and the Association of British Insurers’ Compulsory Code of Conduct is a “common sense agreement” for consumers and the industry, according to MetLife.
It has welcomed the ABI’s Code of Conduct on Retirement Choices launched today which sets out standards on clear and consistent communication to enable consumers to make informed and proactive decisions on retirement income products and to shop around.
The Compulsory Code of Conduct, which needs to be implemented by March 1st 2013, also urges providers to highlight enhanced annuities and the need for advice and support on choices plus transparency in the annuity market.
MetLife as a member of the ABI and the Pension Income Choice Association (PICA) has played a major role in the discussions over the Code of Conduct.
Its own research* shows 81% of advisers specialising in retirement expect the market for fixed-term annuities and other alternatives to conventional annuities to grow over the next two years with 65% forecasting a surge in clients asking for advice on annuity purchase in the next year.
Dominic Grinstead, Managing Director of MetLife UK, said: “The retirement income market needs a step change which enables customers to genuinely shop around and the ABI’s Code is to be welcomed.
“Retirement income choices have to be about more than simply what type of annuity and the focus should be as the ABI says on ensuring that people are encouraged to make positive choices about their retirement income.”
The Code of Conduct, which comes into force today, will also stop ABI members from sending annuity application forms in order to prevent inertia purchases of annuities.
The ABI and its members will consult on the detail of the transparency commitment to ensure comparisons can be made accurately and fairly.