Some Independent Financial Advisers (IFAs) may need to double the annuity business they write in order to stay in business, according to recent research from Just Retirement.

While the mortgage and sales of traditional income generators remain at low levels, many IFAs are being forced to look at other possible ways to generate income. However, the annuity market is becoming an area of slow growth, with research showing that one in three IFAs have written less than ten annuity cases within the past year.

This is despite the fact that receiving the right advice is becoming more crucial for people who are approaching retirement at this current time. Just Retirement has released research which aims to help IFAs break down the barriers in the industry that prevent them from writing more annuity business. It is hoped that the research will aid IFAs in deciding what additional support the industry can provide in order to make the annuities easier to organise and more profitable for them to advise on.

46 per cent of IFAs surveyed by the firm said that larger fund sizes would give them more of an incentive to write more annuities. Although 24 per cent of people said that they would be happier to refer smaller cases to a third party if this option was available to them, 49 per cent of these would instead choose to refer them to another IFA.

With solutions in mind, 25 per cent believed that an increase in support from the providers would give them more of an incentive to write more annuity business and 21 per cent of people said that having a simplified advice process would be beneficial for them.
The view that administration is burdensome and time consuming was demonstrated by results which showed that 39 per cent said that a simpler process would encourage them into writing more business.

Nigel Barlow, head of retirement solutions, said: "Our research highlights the need to raise awareness of annuities among IFAs as well as a potential review of the whole process itself. With a staggering one million people set to retire every year, the annuity market is predicated to be worth £20bn by 2012. An increase in annuity knowledge and a similar process would lead to more IFAs becoming engaged with the market."

- Pensions Age April 2009

Share Story: