Subject to FCA approval, Fidelity will acquire Annuity Direct and its holding company Retirement Angels. The news follows an announcement last week setting out Fidelity's ambitions for the growing retirement market spearheaded by the appointment of Richard Parkin as head of retirement.
Fidelity says as the prevalence of defined benefit pensions wanes, more and more people are coming up to retirement with assets that they need to use to generate income. Too often individuals opt for buying an annuity without considering alternatives or even what their retirement needs are.
In this context, there is an overwhelming need to ensure individuals have access to help and support to ensure they make decisions at retirement that are right for them, says Fidelity.
Annuity Direct will retain its status as an independent financial adviser. It already provides its services to individuals and a wide range of intermediaries, offering a comprehensive retirement service.
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The acquisition of Annuity Direct by Fidelity will provide customers of Fidelity with greater choice and support at retirement, says Fidelity, but also aims to broaden Annuity Direct's services to a range of intermediaries and trustee clients.
Richard Parkin, head of retirement, Fidelity, said: "Fidelity and Annuity Direct have a common goal to provide customers with the very best retirement outcome by focusing on what is right for them not just what is good for our businesses. Having worked closely together over the past couple of years we have decided that by joining forces more formally we can really get to the heart of what our customers need to fulfil their retirement aspirations."
Alan Higham, chairman of Annuity Direct said: "When we originally bought Annuity Direct our ambition was to be known as the company that provided the best possible outcome for people who were converting their pension savings into a retirement income.
"Having fought hard to gain that reputation it was important for us to work with a company that held those same values. I am delighted to say that Fidelity shares the same focus on best outcomes as we do and I am confident that together we can achieve outstanding tangible benefits for our customers."
Fidelity and Annuity Direct already work together on Fidelity's 'RetireWise' service. Launched 18 months ago, RetireWise is used by Fidelity's defined contribution pension clients to help their employees obtain a retirement product that meets their needs.
As well as providing support for Fidelity's business channels, Annuity Direct will continue to serve individuals, pension schemes and other institutions under the Annuity Direct brand as an independent financial adviser. Alan Higham will remain as chairman of the company and will join Fidelity to help develop and deliver on its ambition to become a leading player in the retirement market. Don Grant will become head of Annuity Direct.