Aviva pension - are they gaming the fund valuation?

itwasntme001

So my employer pension plan is with Aviva and i have made a number of lump sum investments recently.  On both occasions i was told i would get the next days valuation price of the funds i invest in.  However on both occasions i got the valuation as of the day i actually sent the money - coincidently at higher valuations then the valuation i was meant to get (as per telephone conversation).  I also do not find out in the transaction history what valuation i got till a few days afterwards.  It makes me think are they doing this on purpose to gain on the price difference?  The first time they corrected their mistake but the second time i only just noticed.  I cant help but think since they have done this twice it can not be just error but down to sheer corruption?

If i send the money to invest today, how can it be invested for the same days valuation???  Whenever i invest in vanguard funds via my broker i need to invest before 11am to get the same days valuation (which are priced after US closes), and with the aviva funds (priced after europe closes) i definately invested in the afternoon on both occasions...

Thrugelmir

As the fund valuations are performed retrospectively after markets have closed. Doesn't matter what date the fund managers put on them, i.e. back date them or date them the day they are published. They'll still reflect the actual days valuation of the fund . All funds will have a cut-off for purchase/sale trades that day. Aviva gain nothing. Other than the management fee that's deducted on a daily basis. Vanguard is probably a much bigger fund and more actively traded fund. Cut-off being earlier to ensure that there is sufficient cash liquidity when the markets close that day to meet redemptions. If there was a surge of sell trades the fund manager would be forced to offload considerable lines of stock during what's left of that day's trading session. 

dunstonh

 It makes me think are they doing this on purpose to gain on the price difference?

You get the price at the next dealing point after they have received the money.   That can be the same day if the money arrives before the daily dealing point.  With Faster Payments, that can mean they have the money within minutes of you sending it.

If i send the money to invest today, how can it be invested for the same days valuation?

....If the money arrives before the dealing point.    

Just checking Aviva's guide and it says trading times vary by fund manager but its dealing points are 10am, 11am, 3pm or 4pm for funds.   

Aviva also pre-fund some transactions.  (as do most of the big insurers)

It will also depend on what type of pension you are using.  

 I cant help but think since they have done this twice it can not be just error but down to sheer corruption?

If it is corruption it would be one that is costing them money and consumers gaining as growth days significantly outnumber loss days.   So, not very good corruption.

What assets are you using in your Aviva pension? 

dunstonh

Clearly, since they corrected their mistake the first time, the second time is certainly an error - perhaps intentionally to "arb" the prices?

You clearly don't work with Aviva very often.    Correcting something that was not actually wrong in the first place because it's cheaper to do then put it through as a formal complaint and risk the £650 FOS fee is pretty common.

  It would not surprise me at all if other pension companies did the same, with their customers completely blind to it all.

You are right.  The whole lot are committing fraud and the regulator and police are in on it too.

The transaction shows up few days later to give the pension provider a chance to see what price would be favorable to them in order to carry out the arb - if the price turns out higher the next day, i get the actual price so no risk free profit. 

In that case, we also need to include the third party software provider in the fraud as well.   And you better include me and every other IFA.   We get daily feeds into our software from the platforms and providers and clearly we must be manipulating the prices to match Aviva's "fraud" as well.  Aviva cannot touch our software so, they would need us to be on it.  And our software providers as well.  Aviva send the daily feed in around 3pm every day.  So, if they are waiting a day or two to manipulate the pricing to commit fraud, They are also finding a way to adjust all of our audit trails.  Or we are all in on it and sharing the 50 pence difference amongst tens of thousands.

itwasntme001

How do you know if was not wrong in the first place?

They could be doing it selectively - with customers like myself who dont have any software or highly unlikely to check these things.  If it is easy for them to correct an error and put it as a human error, it is easy for them to commit this arb at the expense of its customers - if it ever was audited or investigated it could be easily defended as human error.

Thrugelmir

itwasntme001 said:

In my post above, by "actual price" i mean the price i see in the transaction history and therefore what price i got.  The transaction shows up few days later to give the pension provider a chance to see what price would be favorable to them in order to carry out the arb - if the price turns out higher the next day, i get the actual price so no risk free profit.  If the price turns out lower the next day, as was the case for me, then i get the higher price but the pension provider actually bought the units for a lower price.

Client funds are held totally separately from those of the company. The number of units that are purchased on your behalf have absolutely no impact on Aviva at all.  There is no arb. Your imagination is running wild with nonsense. 

[Deleted User]

I like it when dunstonh gets grumpy, puts a little smile on my face