Cavendish Online has launched a commission 'cashback' annuity comparison service which will shake up the industry and save consumers a packet. Cavendish Online is the first to use Webline's Annuity portal to obtain consumer facing quotations and build the question set and functionality utilising their E-CQRF.
The new service, which was launched at the end of January, enables consumers to compare and buy annuities on standard and enhanced terms available from 4 leading providers including Aviva, Canada Life, LV= and Legal & General with more providers being added shortly. It will be the first service of its kind to offer a cashback payment for any commission received above the company's flat fee.
Cavendish Online chose to work with Synaptic Software on this project as they had the most advanced consumer facing panel of providers that offered enhanced terms. Cavendish developed a customer facing front end incorporating the common quotation form, creating a complete journey that helps customers understand the implications of their annuity choices, their health and lifestyle on the annuity income provided.
Cavendish Online's unique pricing model will also give consumers more information on the price and value of advice in the annuity market. The average pension pot at retirement is £36,800* and if all of this was used to buy an annuity it would generate a payout of £1,104 for a broker receiving up to 3% commission, on an enhanced annuity, from the annuity provider. With a £36,800 standard terms annuity providing an income of around £1,600 a year to a healthy 65 year old male, the cashback in this instance would represent an additional 7.5 months of income.
Customers with larger pension pots, with more complex requirements or those who simply decide they require more help in choosing the right annuity, can opt for a guided or fully advised service provided by AS Life, trading as Compare Annuities. The system automatically recognises when a customer indicates that they have a pension pot of over £100,000 or has more complex circumstances or requirements and suggests that they seek advice.
The online system enables customers to generate instant, guaranteed quotes based on the information they provide and the comparison results screen also shows the cashback sum they are likely to receive for the choices of annuity shown. The annuity quotes are the same as those provided to other brokers who retain commission.
Customers could also use the service as a completely free means by which to check that the annuities recommended by their own adviser are the best available whilst also seeing the commission their adviser could be earning from the sale.
The intuitive online process encourages the customer to input all relevant information about any medical conditions and health or lifestyle issues which may affect the size of the annuity offered. The detailed medical information is input just once for the details to be submitted to all of the providers compared and for guaranteed quotes to be generated in a matter of seconds. The customer can see how the indicative quote changes as more information about their situation is entered and their choices for the type of annuity they require are made.
Even when the final quotes are returned for each annuity provider the customer can alter factors such as spousal income, guarantee periods, and increasing income rates to quickly see how they affect the annuities offered. A simple minimum / maximum line chart clearly shows them how their choices affect the potential income offered between the lowest and highest sums available.
Once a customer has chosen their annuity via the online execution only service they are given a summary and links which enable them to print off their pre-completed key facts documents and application forms which can be checked and then sent to Cavendish Online for processing. Eventually the system will be electronic from end to end.
Ian Williams, Managing Director of Cavendish Online said:
"Our new online annuity comparison service will allow consumers to get a quick and underwritten annuity quotation. The service will take them through a process which enables them to keep control of your money, guides them through important decisions about their retirement and encourages them to benefit from enhanced annuities where appropriate.
"Cavendish Online has built its reputation on only charging customers only what's fair rather than taking huge margins. We are committed to returning what we believe to be excess charges and commissions to the customer either in the form of the lowest premiums for life cover or the lowest platform charges for investments. Now we are shaking up the annuity industry and giving those heading into a retirement a much fairer deal."