One of the factors that often gets lost while comparing financial and investment products is: who is the provider of the product? What is the provider’s standing in the industry? People increasingly compare products and shop around to find an annuity that works well for them, but a large proportion of us are not aware of how important it is to compare annuity providers as well.
It is fairly easy to compare annuity schemes, thanks to the multitude of comparison websites, and other tools and resources that are readily available today. However, it is not so easy to compare annuity providers. Comparing different insurance companies means having to learn more about each company and making sure that it is duly qualified, licensed and regulated by the appropriate bodies.
When you compare Annuity Providers, there are certain things to look out for. Always make sure that the annuity provider is well established within the industry – if not particularly in the annuity sector, then within the finance sector. Having a significant reputation to protect means that the company is much more likely to play by the rules and offer a fair deal, than a company that has nothing to lose.
The Financial Services Authority (FSA) – which was the regulatory body and watchdog for the financial industry in the UK, has now been replaced by two different ombudsmen – The Financial Conduct Authority and The Prudential Regulation Authority. The FCA is now the watchdog and regulator for the financial sector and does the job of making sure that the industry remains fair, ethical and healthy. It promotes competition between providers and ensures that customers are protected at all times.
So, when you compare annuity providers, always make sure that you select a provider that is regulated by the FCA. This will ensure that the provider is accountable to the Financial Conduct Authority and must therefore follow by its rules. This layer of accountability is absolutely essential; as it means that as a customer you have the additional protection from future malpractice or fraud.
Choosing an annuity is one of the most important decisions in life – as once purchased, an annuity can usually not be cancelled or returned. It is therefore important to make a considered and well informed choice. In order to make an informed choice, it is important not only to compare different annuity products and shop around on the open market but also to compare the annuity providers.