Zurich Vista

PanamaDave

I naively signed up to a 25 year policy a few years ago when I was young and stupid. I only really wanted a 5-10 year savings plan and believed my financial adviser when he told me that the 25 year term can be easily changed at a later date. It can - I would just have to surrender about 80% of the policy value :rotfl:

As I now become more aware it seems I am locked in to paying there excessive charges (http://zdownload.zurich.com/International/pdfs/MSP2707.pdf; http://zdownload.zurich.co.uk/International/pdfs/MSP11220.pdf). This will be in addition to the charges of the fund I am investing in through Vista - My fund manager selected a Henderson European Fund which has close to a 2% charge. (More awesome work by him :T). I am sure he got a pretty hefty bonus for stitching me up like this.

What is my best approach now in terms of damage limitation? I reduced my premium to the minimum of 300e/month but am committed to paying that for another 22 years! I now have a penalty-free surrender amount of about 6000e so it would be possible, I assume, to just cash that out and roll it through for the next 20 years and not actually put anymore money into it. That being said I really resent that I am going to be haying a fairly significant percentage of my current savings in this fund and I am paying 4-5% for the next 22 years based on 1 mistake I made.

Is there any chance I can get out of it without paying the ridiculous penalties?

Anybody had any similar experiences?

Reaper

PanamaDave wrote: »

Anybody had any similar experiences?

Not this particular policy but we regularly see expats complaining of being sold poor value, long term policies by "financial advisors" (salesmen) overseas.

e.g. https://forums.moneysavingexpert.com/discussion/3396314

dunstonh

Financial adviser in overseas markets is not the same as financial adviser in the UK. Some markets are 20-30 years behind the UK (especially some pacific regions and middle east).

What you describe is not uncommon and typically there is little or nothing you can do about it unless the country you were in at point of sale has a regulatory system dealing with complaints.

PanamaDave

The company is based in Gibraltar and regulated by the British standards.

I just don't know if I could make a complaint at such a later date since they could argue that I kept paying in quite happily up until this point.

brasso

I know nothing about this product but I guess your best chance rests on whether you feel you were mis-sold or misled in some way. If you were, I guess you would need some sort of proof.

Or you could perhaps try to negotiate a switch to a different product offered by the same company that's less punitive.

Another thought is whether this product would be regarded as oppressive in some way i.e. is it simply unfair to offer this product on these terms? If you feel it is, then perhaps you could appeal to the FSA or to some ombudsman.

Finally (and this is a bit desperate) if you think it makes a good story you could try approaching MoneyBox on BBC Radio 4, or one of the financial agony aunt columns in the weekend papers and see if they are interested in taking up your case. If you think your experience is typical of many others, and that people need to be warned, it might just get taken up. If it is, the cases are often resolved in the complainant's favour to avoid bad publicity.

But I'd start by talking to this company and putting your best "I was given the impression I could swap without penalty" voice on, and see where that gets you. If you nag them enough, who knows? They might actually not want to have a very unhappy customer who is going to bad-mouth them on the internet etc.

Good luck!

dunstonh

The company is based in Gibraltar and regulated by the British standards.

Are you saying your sale was regulated by the Financial Services authority using a UK based adviser? As I understand it, Gibralter was not covered by the FSA and your product is not a UK regulated product. A quick check indicates that Gibraltar has its own regulator and does not use the UK one. it is the Financial Services Commission and they have a page on complaints here:
http://www.fsc.gi/consumer/aboutfirm.htm

dunstonh

If you feel it is, then perhaps you could appeal to the FSA or to some ombudsman.

It is not a UK sale and not covered by the FSA and no access to FOS.

PanamaDave

I feel I was mis-sold and misled. I just don't know how much of a defence being an idiot is in court?

I trusted that the FA would act at least to some extent in my interests. He emphasised the bonuses you receive and didn't explain the fees at all. He made it sound like changing between a 25 year term and a 10 year term was as simple as a phone call. We discussed using the funds saved to pay my kids school/university fees. Given they were both already born at the time of this meeting a 25 year term would prove useless for this.

I do think that given the recent law changes on financial products it would be illegal to sell this policy in this manner today. As an example I actually went to see a financial adviser recently and she explained to me exactly how the fees work and that she will charge me 4% of my initial deposit and 1% per annum to manage the money I invest (Put into into a mutual fund which charges me another 1-2% I assume ). I instantly declined these services. It seems unfair that you can be held to a 25 year contract based on 1 mistake you make when you are quite young and uninformed. If it was for 10 years I would accept it as that is what I went there to sign up for and I would put the exorbitant fees down to experience.

Seems like there is a precedent with the banks, where unreasonable bank charges were forced to be refunded at a later date. It seems like unreasonable products such as this could be closed down and people shifted onto better products.

PanamaDave

dunstonh wrote: »

It is not a UK sale and not covered by the FSA and no access to FOS.

Haha. Another genius lie by the FA then?

dunstonh

Can you clarify whether you bought this product in the UK or overseas? The product in question is typically retailed to ex-pats by non-UK individuals/firms

Seems like there is a precedent with the banks, where unreasonable bank charges were forced to be refunded at a later date.

The banks won that court case.

I do think that given the recent law changes on financial products it would be illegal to sell this policy in this manner today.

The changes applied to UK though. Not elsewhere.

PanamaDave

Well, I don't want to comment on this company other than that the guy I used at the time was terrible. I am sure alot of FA's were in that time period and this company no longer uses commission based products but their website is: www.totus.com.

It says at the bottom of the website that they are regulated by the UK FCA.

Is this not true?
Totus IFA is a trading style of Totus Capital Ltd which is regulated and authorised by the Financial Conduct Authority (UK) no. 435973. - See more at: http://www.totus.com/ifa/#sthash.fTzJzroa.dpuf