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AVIVA's MVR ate my profit
Comments
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Even on maximum initial feee of 7%/8% it would be £1050/£1200 so nowhere near £5k.
The illustration provided at outset will have explicitly stated what the adviser will be paid. Out of that, he (or his firm) also has to pay all the costs they incur.
To give an idea, ALL IFAs recently had to pay several thousand pounds toward the cost of compensating investors who lost out when a company called Keydata collapsed because their money was stolen from it and it failed to properly deal with a tax issue.
The vast majority of them never had anything to do with Keydata but they still had to pay.0 -
magpiecottage wrote: »The illustration provided at outset will have explicitly stated what the adviser will be paid. Out of that, he (or his firm) also has to pay all the costs they incur.
At a guess I would have thought the IFA would have taken far less than the maximum which is usually more likely to be taken by tied advisers through banks.0 -
I've not waded all the way through the replies but I think the requests for more info are purely to help understanding. It is very difficult to give a comment on the validity of something without the full facts. I'm not in the financial services industry but still am surprised by some of the questions posted.
EllenGB, if you have withdrawn money in the past and not had a MVR applied can you not find out the max you can withdraw without being penalised and take that amount out?Remember the saying: if it looks too good to be true it almost certainly is.0 -
as a matter of interest what are the total fees paid to an IFA for a 15k investment bond?
ROFL £5k on a £15k investment. You can see the lack of balance with some people posting things like that. I think this fund had an AMC of 1.75% for the first five years and then 1.25% thereafter with no initial charge. So, the cost is around £262 a year.I shall ask AVIVA how much I can take out without tax implications and incurring the dreaded MVR.
5% without tax issues, 7.5% without MVR.5 years ago the ftse100 was at 6000, today it is at 6000. yet a MVR still applies?
Yes it does but there is also other bonuses added that were added when the FTSE was at 3600. However, its good that you now realise that the Aviva fund has outperformed the FTSE100. That is despite a withdrawal of 4% also being made in year 1.
Its also good as that Aviva fund also holds 23% in UK equity but has 34% in gilts and fixed interest along with 9% in cash and 17#% in property. 17% is also in International Equity.
So, to expect it to perform like a higher risk UK Equity fund which it is a lower risk fund with lower risk assets would not be right. Yet in this period of 5 years, it has outperformed it, even with the MVR.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
I will never buy from AVIVA again.
I'm curious why you feel the blame is all down to Aviva and not in any way down to your IFA's choice of a with-profits bond? Granted we don't know your requirements and many posters seem to have asked but as yet have gone unanswered.
The answers to these questions might help people help you.
1. How long did you say you wanted to invest for?
2. Did you say you wanted to make withdrawals?
3. Did you specifically ask for your capital to be protected?
4. Did your IFA tell you about the MVR and that it could be applied for 10 years.?
As previously said by jem16 and dunstonh, an investment bond for only £15,000 seems very weird. From what I have read through a search on here it seems to be something more suitable to at least £100,000 and mainly for higher rate taxpayers. It also seems to be something you would use after using your full S&S ISA allowance - had you done this?0 -
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?
Aviva, along with all other providers, publish a "Consumer Friendly Principles and Practice for Financial Management" for all of their With Profits funds. So if anybody wants to know they can get it from the provider - most have it available to download from their websites.
Because it is published they have to abide by it.i'm just glad i don't have any of these investments.
So you shouldn't as you clearly do not understand them.imho these investments are designed to mislead the investor.as a matter of interest what are the total fees paid to an IFA for a 15k investment bond? i would guess about 5k?
And you accuse Aviva of plucking figures out of thin air?0 -
I wanted an investment for about five years, protected and inflation proof. ...........IFA did not mention 10 year MVR nor was it in the NU blurb he gave me.
If you wanted an investment for 5 years and the IFA gave you an investment which carried a 10yr MVR, then it appears to be the IFA that is at fault and not Aviva.Other booklet referred to possible MVR in case of 'large and sustained fall in the stock market' or 'after a period where investment returns are regularly below the level we normally expect'. " We won't automatically make such a reduction'. "it is less likely that we'll apply a reduction over longer periods of investment". That's pretty vague in my eyes, but hey, I'm only a doctor. What do I know?Ofcourse I took out my full ISA allowance. What makes you think I'm not a reasonably informed person?This is not a case of dealing with a predictable lossI'd appreciate it if those wishing to help me try and avoid blaming the victim line.
However you seem to be blaming Aviva (who appear to have done nothing wrong) and not blaming the IFA who perhaps has given you the wrong product for your needs.0 -
I wanted an investment for about five years, protected and inflation proof.
Then you seem to have a complaint against your adviser - not Aviva.IFA did not mention 10 year MVR nor was it in the NU blurb he gave me. It listed all other charges, with illustrations. Other booklet referred to possible MVR in case of 'large and sustained fall in the stock market' or 'after a period where investment returns are regularly below the level we normally expect'. " We won't automatically make such a reduction'. "it is less likely that we'll apply a reduction over longer periods of investment".
That does not appear to be ground for complaint - the policy did what it said on the tin.Five years ago, the economy looked different. The funds did well. I was more adventurous but had three defensive bnds. I'm older now. More defensive.
That seems to undermine a complaint against your adviser who can only advise you on the basis of where you are now. You are perfectly within your rights to change your mind but not to expect somebody else to pay for the consequences.In all, most investments worked out well.This is not a case of dealing with a predictable loss but with unclear information.
FOS may accept the complaint against Aviva for investigation on the basis of your allegation that the literature was misleading but I anticipate they will argue that a reasonable person would have realised it was not reasonable to expect Aviva to provide precise information and that it was, as Donald Rumsfeld would have said, a "known unknown".0 -
magpiecottage wrote: »The provider will have issued a "Key Features" document which has a prominent section entitled "Risk Factors". Although I have not seen the one that would have been provided to the OP,
I have the Key Features document for the Aviva Portfolio Bond issued Feb 2006.
It states very clearly;
If you take money out of our with-profits funds, we can pay you less than the quoted value of the amount you take out.
Their literature has certainly been plentiful and easy to understand. Yes the MVR does not have specific charges and timing of those charges but I can't see how it could without a crystal ball.0
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