Annuitants to shun IFAs in favour of web - report

IFAs may be pushed out of the market as consumers shop for pensions online, annuity administrator Xafinity Paymaster has warned.

The internet is the second most popular channel for annuity advice at retirement, after consumers' existing investment provider, according to research by Xafinity.

In third place for retirement advice is the investors' current employer or scheme trustee for at retirement advice.

Advisers came in fourth place for pension advice, according to the survey of employee benefit consultants, IFAs and providers.

High street banks came last in terms of popularity for annuity advice.

More industry professionals believe intermediary sales will reduce due to the retail distribution review (RDR) than ever. Of this year's respondents 96% said execution-only business will start to gain ground on advised sales, whereas in 2010 only 72% thought so.

"There was recognition amongst annuity industry professionals in our latest survey that the internet will be a source of much information and, if it is easy for retirees to transact using this medium, it will attract increased volumes of business," said Keith Boughton, director of insurance and payments at Xafinity Paymaster.

"Other retirees will use the internet for research and then discuss their findings with an advisor or simply transact on a non-advisory basis.

"The use of the internet and web-based specialists will certainly be the focus for retirees with mid-range levels of funds."