AVIVA's MVR ate my profit

browniej

ellenGB wrote: »

I've removed some posts as it seems that people were getting a little too personal.

That seems an odd reaction.

However, useful arguments offered by others have been gratefully received.

I hope you mean that you were also grateful to those who offered you a lot of help and links even though they disagreed with you.

thank you to all who offered advise without making me appear stupid or unreasonable.

I don't feel anyone contributed to this thread with that intention. People offered you different views from your own, in some cases professional views based on their experience. Certainly in one or two cases you have been very needlessly harsh against those who offered those different opinions.

magpiecottage

What are you going to do when Aviva passes your complaint on to your IFA and he is legally obliged to address it?

browniej

ellenGB wrote: »

You may believe that I was needlessly harsh but that comment reinforces my impression of an unhelpful personal element in this thread.

You see there you go again. If someone disagrees with you they are classed as unhelpful.

There is a difference in noting factual information and warning me of the difficulties in supporting arguments insinuating that I have been stupid or will be wasting AVIVA's time (assuming I shall lose the case based on limited evidence and reduce other people's profits, i.e. I'm doing something a reasonable, informed, considerate person would not do).

You must be reading a different thread to me.

I see people trying to point out to you where your argument is flawed and you ignoring everything as it's not what you want to hear.

If you had a genuine complaint you should complain and quite a few posters on here would be the first to tell you.

The law expects me to do what I have done.

What law would that be? Aviva's product has done exactly what it said it will do.

Here endeth my defence.

I haven't seen any defence, just an ill-perceived opinion I'm afraid.

browniej

magpiecottage wrote: »

What are you going to do when Aviva passes your complaint on to your IFA and he is legally obliged to address it?

Perhaps EllenGB could confirm;

1 have you complained to Aviva?
2 have Aviva replied?

Or

1 have you gone straight to the FOS with the complaint?

darkpool

magpiecottage wrote: »

DunstonH and I have tried to explain why MVAs are necessary and also that EllenGB's assertions that the literature she was provided with did not explain them adequately are at odds with our experience of Aviva/Norwich Union.

We have been supported in this by a number of others.

One or two other posters have expressed contrary opinions which we have had shown to be flawed. Unfortunately EllenGB seems either unwilling or unable to accept our views, although she has produced no evidence to support her assertions.

That is her right, she is not on trial and we do not decide whether or not redress is due.

However, the fact that she says, at #43, the Financial Ombudsman has accepted her case does not mean she will be entitled to redress for the loss she perceives.

Aviva can still argue that the MVA was an exercise of commercial judgement and, as I have previously noted, that she has suffered no financial loss compared to the alternative of putting it on deposit.

She is entitled to fight on but risks merely making herself look silly.

I understand why MVAs are necessary, I just don't understand why Aviva don't stand by their policy valuations. It's Aviva that send the valuations out, why would they send out valuations if they know the policy isn't worth that amount? At best it is misleading, at worst it's a cynical ploy to reassure investors that their investments are doing ok.

The FTSE100 is near enough at a 5 year high, yet a MVA is still being applied. So how high does the FTSE have to be for a MVA not to apply?

I hope the OP does complain to the FOS and if her IFA has does wrong he get's fined. It should be remembered that the IFA industry does have a bad reputation for putting commission ahead of customers' needs. I do believe that the forthcoming banning of commission is as a result of IFAs pushing products that pay the highest commission.

dunstonh

I understand why MVAs are necessary, I just don't understand why Aviva don't stand by their policy valuations.

You have just contradicted yourself.

why would they send out valuations if they know the policy isn't worth that amount?

The policy is worth that amount on death or the MVR free exit points. It is just not worth that on a surrender because the underlying assets are worth less than the running value.

The FTSE100 is near enough at a 5 year high, yet a MVA is still being applied. So how high does the FTSE have to be for a MVA not to apply?

Already answered on the thread so no point repeating it other than say what has the FTSE100 got to do with it?

It should be remembered that the IFA industry does have a bad reputation for putting commission ahead of customers' needs.

No it doesnt.

I do believe that the forthcoming banning of commission is as a result of IFAs pushing products that pay the highest commission.

The RDR affects all distribution channels. Not just IFAs. IFAs are just one part of it. The FSA has looked into it many times and whilst isolated cases have existed, it has never found widespread abuse. The bigger concerns over commission were the salesforces not IFAs. Indeed, the bulk of recent mis-sales are due to sales targets and sales pressure by non regulated individuals.

However, commission has absolutely nothing to do with the choice of fund. Commission would have been no different had it gone in a UK equity fund or whatever. That has also been covered in this thread based on your earlier comments.

There is no point you joining in on a discussion board if you are just going to repeat the same misinformation and ignore the responses.

darkpool

I just googled "ifa commision bias" and got 527,000 results. Why would this be if IFAs were putting their customers needs first? Perhaps google have it in for IFAs?

Or just maybe IFAs have a well deserved reputation for putting their own need for a new merc first?

darkpool

"It is widely acknowledged that commission bias - where a product is sold because it pays more than another product - is prevalent. There are also fears that IFAs simply move clients' money from one product to another for no reason other than to earn commission, a practice known as churning. And as long as such high levels of commission are being paid, IFAs will never rid themselves of the stigma of product bias."

The above is from the Telegraph.

dunstonh

darkpool wrote: »

"It is widely acknowledged that commission bias - where a product is sold because it pays more than another product - is prevalent. There are also fears that IFAs simply move clients' money from one product to another for no reason other than to earn commission, a practice known as churning. And as long as such high levels of commission are being paid, IFAs will never rid themselves of the stigma of product bias."

The above is from the Telegraph.

That must make it right then if Telegraph and Google search say so. The quote says "There are also fears...". Well that means they have no evidence. Just fears. There has been no evidence despite many checks that widespread abuse has occurred. That doesnt mean it hasnt happened with a minority but you would have to be stupid to apply it to the majority.

Churning has always been a major issue with tied agents. IFAs are encouraged to switch products and usually its a doddle to justify as you have so many people buying expensive products from tied agents that the IFA can undercut them easily. The FSA itself came out with a paper detailing when it was right to switch or not.

How ridiculous you make such statements on a thread that is about an investment fund and nothing to do with remuneration.

magpiecottage

darkpool wrote: »

I hope the OP does complain to the FOS and if her IFA has does wrong he get's fined.

If the IFA has misrepresented the bond then, yes she could complain - but to him, not Aviva. She could also take him to FOS but it has no power to fine anybody. It can only force the adviser to meet the shortfall between what her investment is worth now and what it would have been worth if it had been put on deposit and, as I have previously pointed out, the comments in her posts seem to indicate that there is no such shortfall.

In any case EllenGB is quite insistent that it is Aviva, not her IFA that is at fault, though.

darkpool wrote: »

It should be remembered that the IFA industry does have a bad reputation for putting commission ahead of customers' needs

Whether it has such a reputation or not, EllenGB does not seem to think her IFA has done this.

darkpool wrote: »

I do believe that the forthcoming banning of commission is as a result of IFAs pushing products that pay the highest commission.

You are entitled to believe that, just as you are entitled to believe you are a Jedi knight or Batman. I am not suggesting you do but pointing out that your belief is not necessarily reality.

darkpool wrote: »

"It is widely acknowledged that commission bias - where a product is sold because it pays more than another product - is prevalent. There are also fears that IFAs simply move clients' money from one product to another for no reason other than to earn commission, a practice known as churning. And as long as such high levels of commission are being paid, IFAs will never rid themselves of the stigma of product bias."

The above is from the Telegraph.

And you believe everything you read in the paper? I think if you go back through its archive I think you will find that the Telegraph reported that Piltdown Man was the missing link. What's more, most people agreed. That did not make it true, though.

All IFAs offer the opportunity to pay for the advice by a fee. Some may allow it to be paid by commission as an alternative but in the end, if a consumer chooses that route it is their decision - and the commission payable will always be declared before they buy.