urgent advice needed

donnalove

turbobob wrote: »

Yes I was wondering about that. I was wondering if there was just him as the life assured on the policy or if someone else had been named on it. If it was set up with just your dad as the life assured, then AFAIK there'd be no opportunity to keep it going as it would pay out the death value (101% of unit value?). There would also also be no early surrender penalty and if with profits, no MVR as they are not deducted from death claims.

If it had another life assured on it who is still alive, then cashing it in now would be classed as a surrender and therefore an early surrender penalty would apply (quite a heavy one in first year or two) as well as any MVR if with profits.

yes my dad is the only one named on the policy and we have read about 101% of unit value on death but the figures still don't add up, we were assuming as the value for probate is only £81,000 then there had been a hefty charge levied cos £19,000 is a hell of a lot to lose over 13-14 months.

opinions4u

donnalove wrote: »

yes my dad is the only one named on the policy and we have read about 101% of unit value on death but the figures still don't add up, we were assuming as the value for probate is only £81,000 then there had been a hefty charge levied cos £19,000 is a hell of a lot to lose over 13-14 months.

Here's a link to FTSE performance. Select the "2 year" option to take a look.

It does help you see how a typical tracker investment (not exactly what Dad had, but as a guide) will have performed over the last 12 months.

You'll see a peak at around 5,500 in September 2008. Typical averaging over the last few months have been around 4,500. A drop of 18% (or £18,000).

Remove the cost of advice and the income taken from the fund and it probably isn't a million miles from where you stand now. Possibly having improved in the last couple of weeks.

dunstonh

Lots of information here which appears to be confusing the OP.

we have been given a much lower figure of £83,000 at time of death and even lower for probate value which is £81,000:eek:

That is unfortunate timing as the market is down. The probate value is the value at death. The higher figure is the current value. It may well be a bit higher still depending on when your values are.

We are very confused about the policy as we don't understand why my dad was sold this as it was a 10 year ( according to what we have read) bond and he was nearly 71 at time he took this out!!!

It is not a 10 year investment. It is open ended. Also age 70 is not old and many people are active investors long beyond that.

He also paid the advisor who took this policy out over £7000:eek:

No he didnt. The insurance company credited A&L with £7000 but it was not deducted explicitly from the investment. It is recovered over time through the annual management charges. Also, as he sadly passed away after just over a year, the charges would not have come close to recovering that money paid to A&L and L&G would suffer a big loss on this. It typically takes 5-7 years before the insurer breaks even.

it doesnt really make sense to us as my dad was caucious*spelling*

The size of the loss is within the tolerance of a cautious individual and based on the withdrawals being made. The product itself is able to hold anything from cash right through to specialist higher risk investments.

we are thinking he has been missold a policy i mean why would a 70 year old be advise to take a 10 year !!!!

Nothing you have said suggests any mis-sale I'm afraid.

The use of an investment bond for those in retirement is quite common. They dont get included in long term care means testing. When an income is taken, it has no impact on age allowance (for over 65s) or their tax position as long as its no more than 5% (which it isnt in this case). The charges tend to be lower than other investments (although using A&L wasnt a good idea as neither A&L or L&G have the best priced product).

We are coming to the conclusion he didnt understand fully what he was being told and to be honest we think the adviser might have taken advantage of this which saddens us as whats happenned is exactly what he didnt want to happen and he has lost his money.

The problem you have is that you were not present at any meeting and had no involvement in the discussions. You cannot make claims about what was or was not said as you have no proof. There is some consumer protection that exists that if the person is mentally incapable of understanding what they have done then they can have greater protection. However, your comments dont paint your father in that light.

£19,000 is a hell of a lot to lose over 13-14 months.

No its not. Its within the 25% that is consistent with a cautious risk investment during a bad period. Also, its already recovered some with the higher value of £83k. Plus, your father had withdrawals. Investments zig zag. Always have, always will. The timing was particularly bad in that we had a major economic crisis during that period.

There is also the issue that bank reps are not normally allowed to portfolio plan. You tend to find they will stick to cautious managed funds or distribution funds in cases like these. You havent mentioned what the investment is on this thread yet. Can you tell us?

we were assuming as the value for probate is only £81,000 then there had been a hefty charge levied

Assumptions do no good at all. A little information in the wrong hands could lead to all sorts of errors and jumping to conclusions which are wrong. An internet forum with posts like these can go some way but even we have to make assumptions based on limited info.

If you check your fathers paperwork he should have a suitability report that describes the investment and the reasons why it was taken out and the level of risk that went with it. If that is well documented, then your ability to succeed in a complaint is very low, if not non-existent.

whiteflag_3

I would aslo make the following points:

The bond could have been written on more than one life, therefore the problems with cashing in at a bad time could have been avoided.

I would also point out to the casual reader who may be put off investment bonds as an investment, there are companies out there that build in or have the option of a feature that guarantees return of capital(less any withdrawals) on premature death. The danger of dealing with a bank is they are not obliged to point this out.

donnalove

thanks for your reply the paperwork is very confusing and we don't undertand most of it but at the start of the risk profile( the very top) it does say mr abc does not want to take risks!!!! it is the portfolio bond.

jem16

donnalove wrote: »

it is the portfolio bond.

The portfolio bond has access to many different funds - which actual fund/s was/were used?

whiteflag_3

donnalove wrote: »

thanks for your reply the paperwork is very confusing and we don't undertand most of it but at the start of the risk profile( the very top) it does say mr abc does not want to take risks!!!! it is the portfolio bond.

Hi Donna , sorry to hear about your situation - given what you say here you will have grounds to complain.

btw despite what other people might say £19000 is an awful lot of money to loose for most people, especially if its not your fault!!!

donnalove

whiteflag wrote: »

Hi Donna , sorry to hear about your situation - given what you say here you will have grounds to complain.

btw despite what other people might say £19000 is an awful lot of money to loose for most people, especially if its not your fault!!!

hi yes it is an awful lot, but our main concern is that my dad has put his trust in something that he thought was something else ifyswim. Yes i know you will all say that if the investment was up then we wouldn't be complaing and you would be right, but then we wouldn't have been none the wiser really would we?? as its what we would have expected it to be iyswim.

jem16

donnalove wrote: »

Sorry going back to your first post we have found paperwork and it does say you have paid £7200 to FA who sold the policy so we understand that he has paid them?

donnalove wrote: »

thanks for your reply the paperwork is very confusing and we don't undertand most of it but at the start of the risk profile( the very top) it does say mr abc does not want to take risks!!!! it is the portfolio bond.

If the A&L actually stated both of these things in their document and still put the OP's father into a portfolio bond then seeing a bank is worse than I thought!

whiteflag wrote: »

btw despite what other people might say £19000 is an awful lot of money to loose for most people, especially if its not your fault!!!

It's still a lot of money but the value is £17,000 down minus withdrawals of over £4,000 so a little less than £13k rather than £19k.


My earlier advice still stands OP. See an IFA so that he/she can look over the paerwork. He/she may be able to clear up all the confusion.

dunstonh

£19k has not been lost. That is the value at date of death. The value is higher than that now. It is within the tolerance of cautious. Also, had he been in cash, his value would have dropped as well as over the last year or so you havent been able to get 5% net interest. A bit closer recently but a year ago it more like 1%.

However, if the report says no risk then clearly using a risk based investment is wrong and would be a mis-sale. That said, you need to look at that wording in context with paragraph it is in. Does it explain what type of risk he doesnt want to take and those that he is happy taking.

As you were not present in the meeting, you need to look at the report and use the wording as evidence of mis-sale. If it really does state no risks and no explanation of that exists then it should be an easy upheld complaint.

We still dont know the investment fund(s) though so its difficult to comment on the risk level