AVIVA's MVR ate my profit

darkpool

magpiecottage wrote: »

And you believe everything you read in the paper?

i put more weight in what the Telegraph says than a couple of IFAs on a website

magpiecottage

darkpool wrote: »

i put more weight in what the Telegraph says than a couple of IFAs on a website

As far as I am aware, only one IFA has contributed to this thread, who has no personal axe to grind on this as the OP is not his client and never likely to be.

By contrast, the Telegraph DOES have an axe to grind. It is looking to sell papers and stirring up controversy is really effective at doing that.

jhxmt

This entire discussion is pretty irrelevant anyway, given that ellen has indicated that she does not seem to hold her IFA responsible.

Ellen - if you are planning on making a formal complaint, it will stand you in good stead to set out clearly (a) what the cause of your complaint is and (b) who should be held accountable for that.

If you believe that the policy that was recommended to you was not suitable for your circumstances for whatever reason (e.g. a 10 year investment term was impractical, etc), then (a) would be that the product was missold and (b) would be your IFA, as they sold it.

If, on the other hand, you believe that Aviva have not obeyed the conditions of the contract in some way or have otherwise misled you (and your IFA) as to what the product itself actually does, then (a) would be that deception/lack of clarity and (b) would be Aviva.

The Financial Ombudsman Service generally, in my experience, will only get involved when a complaint has not been resolved i.e. you need to follow the formal complaints process (either to your IFA or to Aviva) first, then proceed to the FOS if you do not receive a satisfactory outcome.

I hope this is somewhat helpful. The clearer you are about (a) and (b) above, and the clearer you make those in whatever formal complaint you lodge, the smoother any complaints process will go.

darkpool

Do you not work in the IFA industry?

How about the FSA? DO they have an axe to grind?

http://www.fsa.gov.uk/pubs/other/pol_res1.pdf

le_loup

darkpool wrote: »

I just googled "ifa commision bias" and got 527,000 results.

I just Googled "Abducted by Aliens" and got 1,700,000 hits, so that makes such a thing true, doesn't it?
Erm, no, I am mot an IFA, am not and never have been in the finance industry.

dunstonh

darkpool wrote: »

i put more weight in what the Telegraph says than a couple of IFAs on a website

I count one IFA. You are letting your bias cloud your vision and ability to count.

So, you prefer to believe what the Telegraph says are "fears" it may happen rather than the research that has shown that whilst it has happened at times the problem is not widespread. That research came from the FSA itself as well as a number of other sources and go back to periods in time where agreed remuneration and fee basis was less common. Sources: Oxera study June 2009, Charles River Assocs 2002 and 2005 & FSA RDR document DP07/1

By your definition, if one apple is bad then all are.

In 2010 FSA published its annual consumer confidence paper finding 98% of IFA clients were confident the advice received was appropriate-confidence had risen by 17% over the year. So, where is this widespread perception you are on about?

I just googled "ifa commision bias" and got 527,000 results

Thats not very much in google terms and given the number of sites the regurgitate the same articles and comments, it will be a lot less. Given the millions of contracts IFAs put in place every year for the last 23 years, that figure is very small.

The RDR changes will actually see many IFAs go on to earn more than they did before. IFAs stand to be the biggest gainers out of the RDR.

Whatever the situation is, the issue is irrelevant to this thread as the adviser in question on this thread would have earned the same whether they used this fund or any of the 200 odd other unit linked funds available. Including those linked to the FTSE 100 you keep talking about which has performed less than the fund that IFA recommended.

jhxmt

darkpool wrote: »

Do you not work in the IFA industry?

How about the FSA? DO they have an axe to grind?

http://www.fsa.gov.uk/pubs/other/pol_res1.pdf

Page 8, executive summary, findings 5 and 6: "adviser recommendations are not dominated by self interest" and "there has been little significant bias in the advice given on any regular premium product".

If you're going to link to documents supporting your point, it would be helpful to read them first to check that they do, in fact, support your point.

And no, I'm not an IFA either, and have absolutely no motivation to protect, support or otherwise align myself with them. I do my own investing. I look after my own money. I prefer to learn about products and do my own research rather than paying someone else to do the same. But this doesn't mean I jump to the conclusion that they are all charlatans, and it doesn't mean that I don't see the benefits that they can provide to those who choose NOT to take the same path as me.

This thread is now massively derailed.

darkpool

no 1.7m hits doesn't make it true.

but some fairly strong academic research shows there is a link between financial products sold and commission paid.

darkpool

i'll grant you the document does say that for some products there is a poor link between commission and products sold. But for other products there is a stronger link.

magpiecottage

darkpool wrote: »

Do you not work in the IFA industry?

Yes - and people like me monitor them to make sure that what you allege is not true.

darkpool wrote: »

How about the FSA? DO they have an axe to grind?

http://www.fsa.gov.uk/pubs/other/pol_res1.pdf

That document was published in December 2001, so the research must have been done before then and is therefore around 10 years old.

1 December 2001 was also the date on which the FSA became the regulator. Since then, as I have indicated, all IFAs (though not necessarily tied agents) have been forced to offer the option to pay by fee. They can refuse to allow you to pay by commission but if you want to pay by fee they have to allow that option.

So if you do not trust the IFA not to recommend the product that pays the highest commission the answer is simple - ask to pay by fee. That, in fact is a point made in the Telegraph article you previously referred to.