FSAV mis-sell, now what?!

shays_mum

My friend had been missold a pension, as his advisor did'nt mention the in-house FSAV scheme. Anyway, long story short...., the FSCS stepped in & have awarded compensation. What i wanted to know is whether he should take the compensation, or take it to an IFA to decide whether to keep this pension, or move to another one as he is know self-employed?. Thanks for any help in advance

dunstonh

My friend had been missold a pension, as his advisor did'nt mention the in-house FSAV scheme.

Its funny that these are still considered mis-sales. I generally find that those with in-house AVCs get more fustrated than those with FSAVCs because of the restrictions upon commencement. Sure, the pros and cons need to be documented and that is probably the area the fell down and where the claim was upheld. However, your friend could well end up better off with the FSAVC.

What i wanted to know is whether he should take the compensation, or take it to an IFA to decide whether to keep this pension, or move to another one as he is know self-employed?. Thanks for any help in advance

There may be benefits attached to the old FSAVC which cannot be matched by modern pensions. Equally, it could have high charges, limited fund choice and not offer much potential for growth in the future. So, without any details it would be hard to say. However, an IFA can write to the provider, get projections, features, terms and charges and compare them with a modern plan.

wattapain

Well actually, I think I was mis sold my FSAVC policy also. i was a member of the NHS scheme - a pretty good one ( by today's standard anyway - was not always so). My Advisor (salesman!!) knew this and should REALLY have recommended I take up the option of buying extra years. I did in fact later buy a couple of extra years but it was really expensive by then. But if I'd done it insteadof taking out the FSAVC it would have been far more cost effective.
Still, we'll never really know and quite honestly I can't be a***d - seeing as the financial services industry is a bunch of crroks and thieves and they only protect their own. :rolleyes:
Terri :cool:

dunstonh

Still, we'll never really know and quite honestly I can't be a***d - seeing as the financial services industry is a bunch of crroks and thieves and they only protect their own

Its funny that because my view of doctors and nurses is that they are all incompetent most of the time. Of course, like you I base that opinon of the whole profession on just one or two examples. Which is totally fair...isn't it?

wattapain

But this is a forum about pensions, not midwifery issues!! :rolleyes:
and I am sure you would agree with my point re added years - Yes?? :cool:

ManAtHome

Oh yes, the Times Of Mis-Selling, I remember them well. A disturbing number of the "Advisors" were ex-nurses who fell for the "loads-a-money" and conned their friends (in fact they were encouraged to target their friends). I did manage to talk my OH at the time out of listening to the crap, it was pretty obvious most of the promises were snake-oil - but then some people believe anything they're told don't they..

Please don't lump people like DH who actually know what they're doing in with the "earn zillions by sitting on your !!!!!!" cowboys brush.

wattapain

Please don't lump people like DH who actually know what they're doing in with the "earn zillions by sitting on your !!!!!!" cowboys brush.

Actually, that was not my intention. I do agree DH does seem to know what he is talking about, and more importantly I think, he is giving his advice in a friendly, impartial way without slapping on a hefty charge for just walking through the door ( a bit like plumbers really ). So I apologise to DH if he felt offended my my post.
And please , no complaints from plumbers :rolleyes: .
My beef actually is with the INDUSTRY ( see my earlier post ), as they do not crack down on unscrupulous operators when there is clear evidence of mis selling. And ther have been too many scandals like Enron, Equitable etc where people have paid in all their lives ( listening to stories that were rather more than 'snake-oil' ) and who saw their plans go belly up as a result.

Terri :cool:

dunstonh

Before we go too far off subject. It was late, I was tired and that sort of response is one that does tend to wind me up. No industry is perfect. There are good and bad in every walk of life. There are also those that are incompetent or just not knowledgable enough to know any different. That doesn't make them crooks.

Once upon a time you got financial advice. Then it became an industry where it was more about sales than it was advice. Problems arose because of that and it became regulated. That regulation has been slowly getting rid of the undesirables. It has also got rid of a number of very competent advisors who found the degree of regulation too expensive (but thats another issue).

Pension mis-selling started the ball rolling and things began to improve. Endowments re-inforced that documentation of the advice given had to be better than it was. It also ensured that where alternatives just as good exist, they should be documented and the reason why they were not chosen should be made clear. Things have improved a lot although there are still a few things that could improve more. There are also a few areas where regulation should be reduced. Sometimes the focus is on unimportant things.

Now, to get back on to subject, buying of extra years is often the best option. However, it can also be the most expensive option. It is also not much use for those wanting early retirement. So, there were times when the FSAVC was appropriate. As I have mentioned before, I have seen more clients irritated that they did in house AVCs (off their own back) because they cannot take the benefits early and had they known that, they would have done an FSAVC instead. Had an FSAVC been done, there would have been a good chance it could have been classed as a mi-sale if the person complained (before wanting to retire). Sometimes you cannot win.

wattapain

Sometimes you cannot win.
A bit like medicine then eh?

Terri :rolleyes:

EdInvestor

Things have improved a lot although there are still a few things that could improve more. There are also a few areas where regulation should be reduced. Sometimes the focus is on unimportant things.

IFAs charge fees of between 75 and 500 quid for genuine independent advice with no commissions payable. Basically they have prioced themselves out of the market for all but the very well off. Thus misselling is sure to continue because the commission connection will not be broken.

Unless people just give up on "advice" completely, and either stop investing, (many people will be happy/can only afford to buy a house and put any leftover cash in a high interest account) or use sites like these instead and execution only cheap brokers with no advice.

After all a key reason for using a regulated advisor is that you get protection from misselling. But if cowboy advisors simply use the protection as an excuse to do the dirty deed, it's all a bit pointless isn't it?

Might as well learn as much as you can from good financial websites and then DIY.You've probably got at least an equal chance of making money and arguably you're less like to lose out if you're better informed.

dunstonh

IFAs charge fees of between 75 and 500 quid for genuine independent advice with no commissions payable. Basically they have prioced themselves out of the market for all but the very well off. Thus misselling is sure to continue because the commission connection will not be broken.

Only if you assume commission leads to mis-selling every time. There has been research into this and there has been no widespread sign of advice based on commission bias. Probably as nowadays there is little difference in the product classes as to what is paid.

The price for fee based advice has to be that high to cover the regulatory costs, running costs, ongoing administration required and a lifetime of liability for that advice. Consumer protection comes at a price.

After all a key reason for using a regulated advisor is that you get protection from misselling. But if cowboy advisors simply use the protection as an excuse to do the dirty deed, it's all a bit pointless isn't it?

With the hundreds of thousands of transactions taking place every week, only a tiny minority will result in bad advice. Yet listen to you and you would think it was a majority.

Might as well learn as much as you can from good financial websites and then DIY.You've probably got at least an equal chance of making money and arguably you're less like to lose out if you're better informed.

I disagree. There are some things which are simple enough to be done like that. However, even the simple things can have alternatives that you just wouldnt be aware of unless you really know enough about it.

I would expect you to take that approach Maggie but you are often wrong on your remarks as you tend to make to many assumptions. Things like bonds always being more expensive and always paying more commission or that everyone should do an ISA and drawdown. It may be right some of the time or even much of the time but it is not always. This is why the IFAs here always seem to be doing a downer on a product (or the reverse) when it isnt our intention. We spend a lot of the time trying to balance out the pros and cons. Usually its because you have posted all the positive points but havent posted the negatives (or vice versa)that we then post the balance to that and appear to take a different stance.

Every product class has advantages and disadvantages and at different times an advantage to one person could be a disadvantage to another. To assume everyone should be doing the same is foolish and that would lead to bad advice.