NPI Flexible Bond with Profit bond 11 - through Chase De Vere

dunstonh

What CDV are doing is taking the NPI surrender value and then reimbursing SOME of their initial commission on the replacement policy. They are only reimbursing 3.5% though. I am assuming that they get top IFA rates and therefore 5% plus 0.5% fund based trail is available to them. I wouldnt accept anything less than the 5%.

Indeed, they may not be offering any commission rebate in that as there are some providers with decent allocation rates without commission gifting. Indeed, I did a small investment recently with 105.25% allocation with no commission gifting.

So, you could consider CDV are being greedy in this.

EdInvestor

http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=401797&in_page_id=3

More details about how to make a successful WP bond misselling claim...

sabelu

Ok thanks for this but part of the ? was would she be better to seek a surrender value direct with NPI, seek to reallocate with CDV (thus receive higher settlement) or accept the lower amount from CDV and come away from them completely ?

sabelu

In reply to 'Editors' response/article the profile of my mother at the time was a 68yr old lady recently widowed looking to secure her future either on her own, or in residential/warden controlled accomodation going forward with a monthly some to put towards household expenses. Her situation falls in many of the articles reasons for misselling.

dunstonh

was would she be better to seek a surrender value direct with NPI, seek to reallocate with CDV (thus receive higher settlement) or accept the lower amount from CDV and come away from them completely ?

If thats the best you are going to get from CDV, then move away from them. They are making money out of this "transfer of provider". If they are that concerned, they should do the transfer with no initial commission and just keep the renewal commission only. There are enough IFAs out there that will do it on better terms.

So, take the value from NPI and shop round.#

With regards to complaints about with profits bonds. The important thing to note that the MVR would have been mentioned in the key features document and any sold in the last (say approx 5-7 years) would have mentioned it in the suitability report. If they dont, then the IFA or tied advisor needs their head checking and that would support a mis-sale case in the clients favour.

Many with profits bonds have an MVR exit period. NPI did for a while have a £30k MVR withdrawal allowance. They dropped it to 10k and withdrew it altogether as it was just a "promise" and not a guaranteed benefit. It would be hard to complain successfully if an MVR free withdrawal date exists.

NPI got a lot of business due to good returns, demutualization bonus and this "promise" along with some good allocation rates. The drop of the bonus rate to zero is not something you can complain about and in reality, it was something that could not have been foreseen.

For others reading this who have with profits bonds, dont think they are all bad. For example, those that I arranged 12 months ago are over 10% up and are MVR free after 5 years. There are some good WP plans and some poor ones like every saving and investment area.

sabelu

On 1st Aug we wrote in to complain re this investment to CDV as yet we have received an acknowledgement every 4 weeks saying that they are very busy dealing with customer complaints and a reply will follow. When should we escalate this to the Ombudsman ?

dunstonh

Bit early yet.

They are probably communicating with the advisor involved and they have to allow sufficient time for him/her to respond. If it is still an active employee, then it would be fairly quick. If the person involved isnt an employee, it can take quite a bit longer.

sabelu

sabelu wrote:

Hi,
My mum took out an investment in the above in April 2002 investing 20K. This gave her a monthly income of £83 pm. The value has just been statemented @ £19089 i.e. lost £910. She has also been advised that the £83 monthly income will no longer come from any profit but from her capital. She can of course keep the money in but obviously CDV have advised against this advising here to move, however, the surrender value as the investment is less than 5 yrs old is £16840. CDV have advised that they could negotiate on her behalf and recoup £17412 however there would be an exit penalty of £572 which they would fund as they feel some responsibility.
Any advice ?
Has anyone had this happen with this bond ?
Should we involve the FSA ?

Just to update you after writing to CDV and escalating to the FSO my Mum has been offered £2100 as a 'jesture of goodwill'. What does anyone think ?

Should she take wait for the FSO ruling or an improved CDV offer ?

dunstonh

Should she take wait for the FSO ruling or an improved CDV offer ?

CDV can take that jesture of goodwill away if you go to the FOS. A goodwill payment is not treated as liability that the complaint is valid. The FOS may then rule in their favour. It should be noted that the FOS side with the advice company more often than against. So, statistically, you could do worse. However, we know nothing about the level of documentation or the quality so we cant really tell what is best.

EdInvestor

sabelu wrote:

Just to update you after writing to CDV and escalating to the FSO my Mum has been offered £2100 as a 'jesture of goodwill'. What does anyone think ?

So how much would she get if she accepted this offer?