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Fraser Heath Financial Management Ltd
39 High Street
Chipping Sodbury
Bristol, South Glos
BS37 6BA
Tel: 01454 327788
Fax: 01454 327799
Registered Address: As Above
Registered in England, No:4357058

Fraser Heath are authorised and regulated by the FSA.

Aviva Admit With Profits Bond Holders should take Action on 10th Anniversary Guarantee

posted 28 Jan 2010 03:49 by Miles Hendy   [ updated 28 Jan 2010 03:53 ]
Fraser Heath has long been concerned about Aviva's stance of allowing the "No Market Value Reduction (MVR) Guarantee" on the 10th anniversary of some of their With Profits Bonds to carry-forward. We have spent much time finding ways of explaining why taking no action can unwittingly cost policyholders thousands of pounds. We think the second of our two videos explains this concept the best of all our attempts.
Article posted initially on our sister website http://www.reattribution.com/with-profits-news/aviva-admit-with-profits-bond-holders-should-take-action-on-10th-anniversary-guarantee

Following www.ifaonline.co.uk picking up on our press release in January, Aviva's head of investment marketing Richard Kelsall responded to my example of how a policyholder would benefit more from acting on this date than allowing the policy to carry-forward, by stating:
"You have provided a great example of when it is absolutely in the customer's interests to switch out of with-profits and 'crystallize' the guarantee at the 10th anniversary... We fully expect customers to take advice on this and where the MVR is significant we expect to see people switching out and taking the benefit on or around the 10th anniversary."

For those policyholders hitting their 10th anniversary today, the MVR is significant. The rates are 18% for those who took out a With Profits Bond in 2000 and 14% for those who passed their 10th anniversary in 1999. All such policyholders are urged to seek independent financial advice or to take advantage of our free with-profits review service.

We urge policyholders to understand that the long term investment return if they carry forward the No MVR Guarantee will be based on their asset share - the figure that would apply if the No MVR Guarantee didn't exist. We believe you should consider the No MVR Guarantee to be a Cashing-in Bonus (or Terminal Bonus).