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About ACH
The Annuity Clearing House (ACH) is designed to help Independent Financial Advisers (IFAs) maximise their clients' retirement income.
There are two ways IFAs can use the Annuity Clearing House:
- IFAs can login to ACH online and take some time to obtain quotes from three leading UK annuity providers (Prudential, Legal & General and MGM Advantage), OR
- Refer a client to ACH and let us obtain all the relevant information and provide the quotes direct.
Whichever option the IFA chooses, ACH will never contact an IFA's client, for purposes other than the annuity purchase, unless the IFA gives their express permission.
For clients with smaller pension funds, the ACH is ideally suited for the IFA to provide fast, effective results with minimal effort. The minimum fund we will accept is just £1,000 (net of any pension commencement lump sum).
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IFAs will receive an introducer fee for all business transacted through ACH of:
Conventional annuity 1.1% of Annuity purchase price*
With Profits annuity 1.4% of Annuity purchase price*
Impaired annuity 1.7% of Annuity purchase price*
Enhanced annuity 1.7% of Annuity purchase price*
*These introducer fees are only available on business submitted and completed via ACH. Please note that no introducer fee will be paid where the annuity purchase price is under £5,000.
The Annuity Clearing House offers quotations on the following product types available on the market:
Conventional annuities
Impaired and enhanced annuities
With Profits annuities
Prudential will provide quotations on conventional and enhanced annuities; Legal & General will provide quotations on conventional, With Profits and enhanced annuities. MGM Advantage will cover impaired and enhanced annuities. All annuities are processed as an Immediate Vestingf Personal Pension (IVP) with the Annuity Provider paying any tax free cash.
ACH are unable to process Purchased Life Annuities.
ACH - Summary of benefits:
- IFAs may be paid more than if they transacted the business themselves.
- IFAs have the option of obtaining instant annuity quotes using ACH online or referring their client to ACH to obtain relevant information and provide quotes direct.
- Quotes supplied will include conventional, enhanced, impaired and With Profits annuities.
- The annuity providers will receive electronic data making the entire process significantly quicker for all parties.
Example
Mr Smith has a pension fund of £7,000. He goes to his local IFA who, at 1% commission of the annuity purchase price (£52.50), may not want to spend too much time trawling the market to find the best available annuity rate.
The IFA instead decides to spend a two minutes referring Mr Smith to the Annuity Clearing House, via their website. A member of the ACH team speaks to Mr Smith on a non-advised basis and produces a number of annuity quotations through a single electronic request form. The IFA still earns an introducer fee of 1.1% (£57.75) commission.
After choosing his preferred annuity quotation, all Mr Smith needs to do is sign the application form that is pre-populated and emailed to him from the ACH website, knowing that he has secured a higher retirement income every year for the rest of his life. ACH then let the IFA know when the tax free cash has been paid so that he can go back to Mr Smith regarding any further investment opportunities.
In addition, should the ACH team identify that Mr Smith could qualify for an even higher income from an enhanced or impaired annuity due to lifestyle or health issues, they will complete an online medical questionnaire and the uplift on a pension fund of only £7,000 could be as much as an extra £200 a year. This wil also increase the IFA's introducer fee to 1.7% (£89.25).
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