Penny asks:

My mother may need an immediate needs annuity soon to pay for long term care. I see that there are only four providers to get quotes from and it all looks fairly straight forward so, if we need to buy one, I'd like to use a fee-based execution-only broker who will rebate all commission to us - but the one who seems to come top of the "best buy" leagues for stakeholder pensions doesn’t seem to do immediate needs annuities. Any advice on how to locate someone who delivers a good value execution-only service?

In Care fees planning is a complex area and whilst I am sure that you could find an adviser who will do “execution-only” business, I doubt whether they will understand all the nuances required and I would urge you to not to do this for an immediate needs annuity, which is designed to pay the costs of care.

The reason I say this is not just because sorting out the funding of a person’s care fees can be complicated, but for the purchase of the plan to be treated as a true execution-only transaction you have to tell the adviser exactly what you want them to do, such as:

Ask for quotes for a plan with a benefit of £xx per month.
Specify the company, of which there are currently two, not four.
Include (or don’t) any escalation, which you will have to specify at what level (5%, RPI, RPI +2%, NAE (national average earnings).
Include (or don’t) any capital protection and/or money back guarantee.
Decide whether or not you want the plan to start straight away or after a deferred period, if it’s the latter you need to specify the time period.

I appreciate your wish to pay a fee and, to be honest, more and more advisers are offering a fee-based service, but this choice doesn’t make it execution only. Should you, during the course of the process ask your adviser a question such as “is this benefit level ok?”, “what level of escalation should I choose?” or “do you think capital protection is a good idea for my mother?” the answer will negate the execution only process.

Instead, I recommend that you talk to a qualified care fees planning specialist (such as a Symponia member) who will agree to work with you on a fee basis. Immediate needs annuities are not universal panaceas, but they should be placed into the mix by everyone funding their own care, if you then decided to purchase an immediate needs annuity, the adviser would sacrifice/return the commission payments, but you would be safe in the knowledge that you have been given you sound advice and the chosen plan is tailored to your own needs and circumstances.

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