AVIVA's MVR ate my profit

magpiecottage

Loughton_Monkey wrote: »

This is not a boring thread. In fact it is quite interesting. I have read it from start to finish.

Loughton_Monkey wrote: »

I am just guessing, but I imagine the IFA involved is probably the one deserving the award. He has probably explained it 'to death' and yet had an ear-bending to end all ear-bendings - and is probably thinking of emigrating.

A couple of years ago, somebody coined the term "toxic investment". The other side of that coin is "toxic investor".

"We took risks, we knew we took them; things have come out against us, and therefore we have no cause for complaint" - from the final diary entry of Robert Falcon Scott

jem16

Loughton_Monkey wrote: »

I am just guessing, but I imagine the IFA involved is probably the one deserving the award. He has probably explained it 'to death' and yet had an ear-bending to end all ear-bendings - and is probably thinking of emigrating.

I was beginning to think - although I will no doubt be called unhelpful, disresepecful and misrepresenting the facts again - that perhaps the IFA "has no answers either" really means "no answers that EllenGB wishes to hear", i.e. Aviva are wrong.

I am also thinking that the OP never mentioned 5yrs to her IFA as I really can't see an IFA providing something with a 10yr MVR to a client who expressly asked for a 5yr investment. It would have missale written all over it and land him/her in deep trouble.

darkpool

dunstonh wrote: »

You obviously dont get out! Although, its not exactly a topic of conversation you have with people.

I am sure that any family that has suffered a death/illness where the IFA set up the life cover that perhaps the person didnt really want will be very happy with the IFA. Or the people that were persuaded to put proper money towards their retirement provision and not the minimum premium that DIY allows will be happy with the result.

This mistaken belief that IFAs have crystal balls to predict events is just silly. All it shows is that you dont know what an IFA does.

Despite my thoughts that £15k in an investment bond is a strange decision, the OP has made more money than a FTSE tracker. Given the fact that EllenGB would have lost around 43% of her investment had she gone FTSE tracker during that 5 year period, could you imagine the comments then if you only base it on what has been said on this thread so far? If you want guarantees/protections you WILL NOT get the positive returns of the same level as non guaranteed investments.

you can gauge how rich someone is by their house/ size of boat/ how much land they own?

the financial industry sell products that are too hard to understand. a likely reason for this is to mislead the client over the amount they pay in fees.

since the FTSE100 has went sideways over the last 5 years why would a tracker lose 43% in that time?

i'm a sceptic, i believe IFAs sell products to people that don't really understand them

dunstonh

you can gauge how rich someone is by their house/ size of boat/ how much land they own?

No you cant. They could be leveraged up to the hilt. Some of the wealthiest people I know would give you no outward impression of that wealth. They drive 15 year old cars, have 3 bedroom bungalows etc.

the financial industry sell products that are too hard to understand. a likely reason for this is to mislead the client over the amount they pay in fees.

Thats a massive generalisation. It also indicates that you think most people are stupid. I am sure that is not the case.

since the FTSE100 has went sideways over the last 5 years why would a tracker lose 43% in that time?

It didnt go sideways. If you look at a graph of the 5 year period it went up a little then went down 43% before going back up again. People don't just shut their eyes for 5 years. They look at the statements each year. If they can accept the volatility then it won't be an issue. Its never fun to see a drop like that but many people cannot cope with drops of that size. During that 5 year period, the £15k would have dropped to around £10k. If ellengb is complaining about growth that has been more than the FTSE100, then what would she be like after seeing that loss?

i'm a sceptic, i believe IFAs sell products to people that don't really understand them

I think that is inevitable. However, nothing wrong with that. We all buy cars but we don't know how they work beyond the basics. We have central heating boilers in the house which we have bought but we don't know how they work.

All you need to know is the basics and understand what can and will happen. Understanding how a WP fund works is not difficult. It is one of the less transparent options nowadays but that doesnt make it any more difficult to get a grasp of the basics. It also has a very simple charging structure.

There are people who don't want to understand and prefer to remain ignorant so they can stick with their biased and negative views. You can't help them understand because they don't want to.

darkpool

dunstonh wrote: »

Thats a massive generalisation. It also indicates that you think most people are stupid. I am sure that is not the case.

when it comes to money/ investing i think most people are mugs.

magpiecottage

ellenGB wrote: »

Re medical outcomes, one has to be clear and make patients aware of likely outcomes, e.g. risks, what they are and how common. No one knows what will happen but research and knowledge will give you info re possible reactions...... Some side-effects are common, some are rare, and if there is a risk of a severe and potentially life threatening reaction, i.e. it has been reported, it will be listed. That degree of information allows you to make a decision whether you take the drugs, or not.

But they do not list all reported side effects, do they? I was listening to More or Less on Radio 4 last night. The point was made that it will only be reported if it can be statistically demonstrated to have caused a side effect - they have to be at least 90% certain of a correlation before it is listed. If they are only 89% sure that it happens to some people nothing is said.

That seems, to me, significantly worse than Aviva's position.

ellenGB wrote: »

If the information says that a particular charge is not going to be applied when the stock market is doing ok, the fund is rated as excellent and five star, AVIVA's own documentation (now) indicates that the listed criteria for MVR are not met (it's outperforming building societies etc, no recent major falls in the stock market), and you had no idea that there was a ten year limit (still not in my documentation), then there are a lot of unknown unknowns.

If that is really what the documentation says then, as I have said previously, you may have a complaint. However, I would be surprised if it really does say that.

ellenGB wrote: »

But the financial world is different from the world I operate in.

I think that is something we probably agree on.

ellenGB wrote: »

I've reported person who seems to be acting as a troll. There's no need for insulting remarks.

I have seen people disagree with you - and put their views firmly - but that does not amount to trolling.

Might I suggest a diagnosis of hypersensitivity?

magpiecottage

darkpool wrote: »

when it comes to money/ investing i think most people are mugs.

Looking at some of the posts on this thread, you may have a point.

There are limits to what even the most diligent IFA can do and there's no helping some people.

You can give somebody the Key Features but you cannot make them read it and you cannot stop them believing it will do something that it never said it would do.

As I have not seen the actual documentation given to EllenGB I cannot be certain but, based on my experience of Aviva, I think that if I were asked to investigate her complaint I would expect to reach the conclusion that she had been in a position to make an informed decision (to the extent that she understood her knowledge was limited).

Whoever investigates her complaint will see the documentation and may find differently - but I would be surprised.

dunstonh

I've reported person who seems to be acting as a troll. There's no need for insulting remarks.

I dont think anyone is trolling against you. Not unless there have been posts that have been removed that we can no longer see. There have been some troll posts on this thread but you were not the target. They were aimed at me.

The issue is mainly that your perception of what you have differs to what you actually have and how it works. For example, comparing it to the FTSE100 when it actually has only a small amount linked to the FTSE. You also do not seem to realise the level of decline in the stockmarkets, fixed interest sector, money markets and property that took place. To say that there have been no recent drops is wrong. We had a level of decline recently that you typically only see once in a generation. Yes, you are back in surplus now but you cannot underestimate that impact that had.

Ask Aviva if you have the 10 year MVR free exit point. The 5 year version was limited special offer but the 10 year version was standard.

For example, I got hold of a the offer from that period which gave the 5 year MVR free exit point and it says:
This offer is in addition to the money-back guarantee
already offered on the tenth policy anniversary on the
same fund.

dunstonh

Well, I think that insinuations that I have not been accurate in my description of the info I had around the time I took out of the bond, ergo, I'm lying, is distressing, and its repetition comes under a law you probably are familiar with

I have copies of what the Aviva paperwork looks like from that era. So, in that respect I am looking at that.

And there is the argument that I really don't know what I'm talking about, which, based on the info given, is insulting.

With respect, based only on what you have posted on this thread it does look like you don't know that much about the subject. That is not a bad thing. You cannot know everything. People drive cars without knowing how the engine works. That doesn't make you stupid. You shouldnt take that as an insult. It appears you know a little but are then making assumptions based on that knowledge. Some of which is right but some of which is wrong.

The MVRs are reviewed weekly so what happened a few years ago is now not relevant.

It is relevant as the stockmarket is still lower than the high point. Property is still lower than when you started the investment, some cash deposits lost money (as they dont get FSCS protection).

In reality, the MVRs only tend to get adjusted a couple of times a year. There often is a lag coming out the other end just as they tend to be late adding them as well (after things start going down).

I've done reasonably well with the bond, but if there is a double-dip, those MVRs are likely to increase. Best in my view, to put money into bank account.

I disagree. If you do have the standard 10 year MVR free exit point then you have a product that will pay you the higher of RPI inflation or the current value at year 10. That seems to be a good hedge with good potential to exceed savings rates.

You also seem to be focusing on a double dip. you dont say what sort of double dip you are on about. If its recession then a few quarters of negative again may have little or no impact in a period of 5 years. After all, we had a major shock of the levels not seen in generations during your first 5 years yet you still came out on top.

This is abut a number of issues including clarity and breach of contract. If they write that a MVR will be applied in circumstances A to C, and they dont keep to that, it's not something i wish to encourage.

There is no breach of contract and the aviva documentation is quite clear. I have the docs from that period and it is exactly what you would expect it to be.

The short version of key facts doesnt go into the full detail that the main guide does. However, that is the point of the short version as it is only key facts.

They do tweak them periodically based on points people raise or complaints made. If you had taken it out in the late 90s or earlier then the documentation of that era was dire and when you look back at documentation then compared to now you wonder how they got away with it. Maybe in 10 years time we will look back and feel the same way about docs issued now.

One question I do have is that the guaranteed element of the Inflation proof version of the fund did not have an MVR charged. The standard version did. Here is also a copy of the letter sent out on 5th anniversary:
http://www.aviva.co.uk/adviser/product-literature/view-document.cgi?f=samplecustomerletter.pdf

In the notes that accompanied that sample letter, it says:
The Inflation Protected Guarantee is not affected by any Market Value Reduction (MVR) or final bonus. The cash-in value without the guarantee may be affected by any MVR.

darkpool

Imagine a policy holder getting a policy valuation from Aviva and actually expecting to get that money!!!! what a carry on, everyone knows insurance companys make these figures up.

shocking, OP should really be paying Aviva for the hassle of giving her money to her IFA in commission.