Canada Life Group UK announced today that it had reached an agreement to acquire financial services provider Retirement Advantage for an undisclosed sum.
"This transaction enhances our position and broadens our product suite to include equity release mortgages,” said Doug Brown, Canada Life UK's executive vice-president and chief executive.
The agreement brings the number of annuity providers in the UK open market down to just six.
Craig Fazzini-Jones, chief executive of Retirement Advantage said: “This acquisition is a positive endorsement of the business plan we adopted following the UK pension reforms announced in 2014 that transformed our business and drove the creation of innovative retirement solutions. As we join Canada Life, we will be well positioned to build upon that success and provide greater retirement protection for our customers.”
Nathan Long, a senior pensions analyst at Hargreaves Lansdown, said it was "disappointing that another provider has left the market and long term this cannot help competition, something we know the FCA is currently concerned about".
But he added: "Retirement Advantage’s innovative retirement income solutions could get a new lease of life with Canada Life’s backing."
The transaction is expected to close near the end of 2017, with the companies anticipating that regulators will take between three and six months to approve the deal.
Retirement Advantage was created in 2015 when funds managed by TDR Capital LLP merged the retirement income and equity release divisions of MGM Advantage and Stonehaven. The company has over 30,000 pension and equity release customers, and more than £2bn of assets under management.