AVIVA's MVR ate my profit
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When I got the policy, there was nothing about time and amount. Indeed, the policy states that there may or may not be a MVR, depending on their finances that day and if the stock market is falling
I doubt the FOS will be able to help you then as you freely admit you knew about the existence of an MVR (or MVA).
From their website;
http://www.financial-ombudsman.org.uk/publications/technical_notes/with-profits.htm
complaints about the size and timing of an MVA and the operation of the fund
We do not normally consider a complaint about the timing or size of an MVA. Under rule 3.3.1 (11) of FSA’s "DISP" rules (the complaints-handling rules that businesses must follow), we may dismiss a complaint if it is about a legitimate exercise of a financial business's commercial judgement. Imposing an MVA would usually be this type of exercise.0 -
You haven't read my posts jem.
I have actually but you don't appear to have read mine. You have said on several occasions that you knew about an MVA.the wording was hardly transparent
They clearly say it might apply.and they take each case on their own merit. They've taken mine on.
I wish you'd make your mind up.I've complained to the Financial Ombudsman, but there's little she can do except emphasize.
It would be interesting to know exactly how much you would get if you withdrew now. You said you invested £15k and have made at least one withdrawal of £600.0 -
The FTSE is high, yet they still charge a MVR?
Less than 2 years ago the FTSE100 was around 3500 yet I doubt the OP's fund lost as much as it would have had it not been in a with-profits fund. It takes time to recover that loss which is what the smoothing process is all about.Perhaps people defending MVRs could confirm if they work in the financial industry?
No I don't.
I'm also not defending nor crticising MVRs. If you don't like the idea of an MVR then don't invest in that type of fund. If you do invest you have to accept its limitations.0 -
Ellengb you have probably found by now that when we laymen ask questions about financial matters on this forum we are frequently answered by the professionals with scorn rather than sympathy.
They will frequently point out those clauses in the fine print we thought we understood but too much later found we didn't.
Their replies may be factually correct but often they suggest we should have known better when we picked whatever poorly performing product we are complaining about.
They will say Caveat Emptor.
Watch this space - I can sense some flack coming my way soon.0 -
Less than 2 years ago the FTSE100 was around 3500 yet I doubt the OP's fund lost as much as it would have had it not been in a with-profits fund. It takes time to recover that loss which is what the smoothing process is all about.
i would understand an MVR if the FTSE was at 3500. but with the FTSE at 6000 i don't see any real reason a MVR should apply. what's the point of the smoothing process if the insurer can just take money back through a MVR? surely the whole point of the annual bonus is that it isn't taken back?
i agree a MVR might be suitable in extreme stockmarket crashes, but in this case it does seem to be used with no real justification.
MVRs might be in the terms and conditions of the policys, but they certainly seem sharp practice to me.0 -
an attempt to get clarity and fact from the op seems to have happened here.Ellengb you have probably found by now that when we laymen ask questions about financial matters on this forum we are frequently answered by the professionals with scorn rather than sympathy.
or attempt to find out what was said about MVR at point of sale.They will frequently point out those clauses in the fine print we thought we understood but too much later found we didn't.Their replies may be factually correct but often they suggest we should have known better when we picked whatever poorly performing product we are complaining about.
it has been hinted at by more than one poster that the op should complain to the ifa who sold the plan.They will say Caveat Emptor.
only because your post doesn't reflect the thread. Of course any complaint will fail if it has contradictions in it.
Watch this space - I can sense some flack coming my way soon.0 -
i would understand an MVR if the FTSE was at 3500. but with the FTSE at 6000 i don't see any real reason a MVR should apply. what's the point of the smoothing process if the insurer can just take money back through a MVR? surely the whole point of the annual bonus is that it isn't taken back?
The insurer has to be fair to all investors in the with-profits fund.i agree a MVR might be suitable in extreme stockmarket crashes, but in this case it does seem to be used with no real justification.
Look at the graph on P7 of this document.
http://www.aviva.co.uk/adviser/product-literature/view-document.cgi?f=gn07060c.pdf
Let's assume that the OP is currently at about Point Y on that graph. The blue line shows the unsmoothed return of the fund with high growth from just past Point X, much like the growth from mid 2009. However still not quite enough growth to remove the MVR completely. Next month or next few months that MVR may be removed but no guarantee. Justified or not this is where the insurer is coming from I suspect.MVRs might be in the terms and conditions of the policys, but they certainly seem sharp practice to me.
Then don't invest in them.
The problem is that the OP feely admits that she knew about the MVR when she agreed to the investment. Now that it is being applied she wants to complain that is unfair even though the FOS states that they won't consider a complaint which is down to the size or timing of an MVR.0 -
i think this indicates you don't know how the english language works. If you get a statement that says your investment is worth 10 pounds i think it reasonable to expect you would get 10 pounds if you sold your investment. But life assurers turn round and say "no, we take 10% off your investment because we feel like it"
I understand the English language pretty well, thank you.
The point is that the insurer says they will buy the units back for a minimum value in certain circumstances (or on a certain date). They tell you what that value is. However, if those circumstances do not arise you will only be entitled to your share of the underlying asset value.
What you are arguing is that they should take money from all the other unitholders to pay the OP who can then, if they so choose, buy back in at the true value. I do not think that is either a fair or reasonable way to treat them.again i make the point that the financial services industry seem to make more money from client's money than the client does themselves.
Possibly - but as I have said, the costs of regulatory compliance and consumer protection are very high.OP would have been better with an inflation linked product from the post office.
With hindsight, perhaps but if you know how to plan your finances with the benefit of hindsight I suggest you buy a ticket for next week's lottery.0 -
The FTSE is high, yet they still charge a MVR?
1 - The FTSE is lower than it was.
2 - The fund doesnt 100% invest in the FTSE
3 - Over 5 years, the fund has outperformed the UK equity sector average.
Personally, I find the recommendation of £15k in a bond as very weird. It has tied or multi-tied written all over it rather than IFA. Its not difficult to understand why it has an MVR and its not difficult to see the returns and where it is.
The FOS have no issues with MVRs. Thats just smokescreen or lazy telephone. i.e. rather than explain it to someone that doesnt want to understand, its easy to just agree how bad and get them off the phone ASAP.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
The problem is that the OP feely admits that she knew about the MVR when she agreed to the investment. Now that it is being applied she wants to complain that is unfair even though the FOS states that they won't consider a complaint which is down to the size or timing of an MVR.
but i think the point being made is that the stockmarket is high just now. so why apply a MVR? the ftse100 has an all time high of 7000, it's about 6000 now. yet aviva consider this "poor market conditions"
the selling point of these policys is the smoothing out, yet if you want your money back they claw back your annual bonuses? how can that be considered fair? unless you think the ftse is displaying "poor market conditions" at the moment?
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