A new retirement income service that allows independent financial advisers (IFAs) to earn a fee for introducing clients who are unable to afford full advice has been launched by the Annuity Clearing House (ACH).

The new service gives IFAs the opportunity to build new revenue streams while obtaining higher incomes for many of their retiring clients. It specialises in securing competitive income rates for pension pots from just £1,000 up to £50,000.

Stephen Hunt, managing director of Rockingham Retirement, told Pensions Age that the system is so simple, the process of obtaining an income solution for a client takes an average of just seven minutes. The ACH searches the three most popular retirement income solutions - conventional lifetime annuities, enhanced and impaired annuities and with-products annuities.

"ACH is good for the consumer and for the IFA because it addresses two huge issues," explained ACH chairman, Peter Quinton. "The majority of retirees, particularly those with small pension pots, either cannot or will not pay hundreds of pounds for advice with the result that those who need the extra income end up with less."

Quinton told Pensions Age that, despite IFAs being aware of the scale of the problem and wanting to offer guidance, they have not previously been in a position to help as they know they would incur a loss.

IFAs will receive a referral fee for all business that is transacted through ACH, gaining 1.1 per cent of annuity purchase price for a conventional annuity, 1.4 per cent for a with-profits annuity, and 1.7 per cent for an impaired or enhanced annuity. Business will initially be placed with Prudential, Legal & General and MGM Advantage.

Quinton added: "The ACH is looking to make it worthwhile for IFAs to be able to process small business and make money from it."

He revealed that the ACH will look to build a fixed term annuity option into the offering.
Hunt admitted that it will be a "slow-burn revolution. We are looking to try and change the face of how annuity business is written. We're also looking at e-signatures. The holy grail for everyone involved is systems as efficient as they can be."

IFAs can register to use ACH or see a demonstration of the service here [http://www.theach.co.uk].

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