AVIVA's MVR ate my profit

jem16

darkpool wrote: »

To start the ball rolling i'll tell you about my WP experience.

I invested an annual sum with Scottish Widows for ten years. At the end of 10 years I got the sum I invested back with 2% on top. I do suspect that the financial industry made a lot more from MY money than I did

I thought you didn't have any WP products?

darkpool wrote: »

so basically the annual bonus is plucked out of thin air by aviva? it has no relationship to what the policy is actually worth? so all the talk of "smoothing" returns is basically a lie? i'm just glad i don't have any of these investments.

The OP seems to have done quite well out of hers though.

darkpool

jem16 wrote: »

It's not in the small print though - it's in the same large print as the rest of the info.

This website promotes consumer's interests yes. However I doesn't, I hope, promote ignoring the T&Cs that you signed up for and which people should ensure they read. It's the same in every business whether it's a financiial product or buying a bed.

something tells me that IFAs will concentrate on the nice "smoothing" effect and not on the nasty MVRs though.

i do agree that you don't seem too concerned about consumer interests. you think the customer is always in the wrong if unfair treatment is mentioned in the terms and conditions?

in all honesty how many people read the T and Cs for every contract they enter?

darkpool

jem16 wrote: »

I thought you didn't have any WP products?

no i don't now

dunstonh

I think WP policies are a poor investment. I'd honestly be interested if some other posters shared their experience of WPs.

They are largely an obsolete investment that is suitable for a minority. However, you cant pile them all in one category. For EllenGB, it has been a good investment that has beaten the FTSE100 as well as offering a capital guarantee and inflation proofing.

To start the ball rolling i'll tell you about my WP experience.

I invested an annual sum with Scottish Widows for ten years. At the end of 10 years I got the sum I invested back with 2% on top. I do suspect that the financial industry made a lot more from MY money than I did

In what period did that occur? There have been a number of 10 year periods in not to recent times where investments were lower after 10 years because of poor stockmarket performance. Did yours occur in one of those periods? Without knowing the period we cannot compare as you could include people that had 10 year periods where they doubled their WP investment. Or tripled or quadrupled. Without putting periods in context the figures mean nothing.

What you suspect is irrelevant and is probably wrong. Most insurers have actually had to close their doors for business and/or sell up as their with profits fund killed them off as viable companies.

this is a consumer website, yet people are defending the use of small print to reduce the value of clients investments??? anyone realllly think MVRs are in the consumers interest? anyone else think you shouldn't complain about a policy because the IFA that sold you it might get upset?

Its not small print. The IFA would have had to detail if in the suitability report. It is documented in the PPFM. Many providers dedicate a section in their key features document. MVRS are logical for that type of investment it is. Please tell us how you think any alternative could work? Its easy to slag off things you dont understand but much more difficult to come up with an alternative.

If the IFA has done wrong then you should complain. However, what is the point of complaining when there is no wrong doing? In that case, all you are going to do is generate a cost of the IFA and possibly burn bridges.

An investment where an annual bonus is added each year depending upon the underlying investments performance. the annual bonuses and initial investment are subject to reduction if the insurance company feel like it. all marketing literature that refers to '"smoothing" returns is misleading as the annual bonuses are in no way guaranteed.

That paragraph is incorrect.

darkpool

dunstonh wrote: »

Please tell us how you think any alternative could work? Its easy to slag off things you dont understand but much more difficult to come up with an alternative.

be honest, it is very easy to slag off WP policies. the problem is life assurance companies send out valuations with no basis in reality - perhaps if they stopped doing this it would save all this confusion? or maybe WP was never really a good idea in the first place?

from the sound of it the OP would have been better going down the post office and getting some inflation proof products. if she wants some stock market exposure she should get a tracker or investment trusts.

darkpool

dunstonh wrote: »

That paragraph is incorrect.

what is incorrect about it? are the annual bonuses not subject to review?

dunstonh

be honest, it is very easy to slag off WP policies. the problem is life assurance companies send out valuations with no basis in reality - perhaps if they stopped doing this it would save all this confusion? or maybe WP was never really a good idea in the first place?

WP served generations of people with no problem. However, it did and still does have issues but then many things do. However, no product, fund or whatever, is going to be free of confusion if you choose not to understand it.

from the sound of it the OP would have been better going down the post office and getting some inflation proof products. if she wants some stock market exposure she should get a tracker or investment trusts.

The Aviva plan offered RPI indexation or investment returns if higher. There is no NS&I product available that matches that. If she wanted direct stockmarket exposure, then ignoring the fact what she has, has done better, then using more direct stockmarket options would have been better. However, that doesnt make the fund bad.

When you buy a vehicle you buy one to match the needs. If a vehicle is unsuitable it doesnt make it bad. It may be suitable for others. e.g. if you want a vehicle that is going to do a school run then you dont buy a helicopter. You buy a car. However, a car wont transport you to a North Sea oil rig.

what is incorrect about it? are the annual bonuses not subject to review?

Annual bonuses once added cannot be taken away. The final bonus can and will fluctuate. The MVR is only chargeable mid term and not at maturity, or if open ended, not charged at an MVR free exit point or death.

darkpool

dunstonh wrote: »

WP served generations of people with no problem. However, it did and still does have issues but then many things do. However, no product, fund or whatever, is going to be free of confusion if you choose not to understand it.

perhaps WP worked better in the 1970's when inflation was a lot higher? it must have been easier to hide the high commission if inflation/ nominal investment reurns are a lot higher?

talexuser

darkpool wrote: »

in all honesty how many people read the T and Cs for every contract they enter?

I can just see the picture:
Judge "Is this your signature under these terms and conditions?" Plaintiff: "Yes, your Honour."
Judge: "And exactly what is your complaint against this contract?"
"Err... I didn't read it...."
:rotfl:

jem16

darkpool wrote: »

i do agree that you don't seem too concerned about consumer interests.

Try looking through some of my other posts on other threads.

you think the customer is always in the wrong if unfair treatment is mentioned in the terms and conditions?

Why is unfair to protect all the investors in a with-profits fund? That's what the MVR is doing here.

The point you are missing is that if you think the T&C are unfair then you find something else.

in all honesty how many people read the T and Cs for every contract they enter?

People should though. Otherwise how can you decide if something is right for you? If you take out a contract without doing so, you have only yourself ot blame - ignorance is no defence in the law.