It Gets Worse! There is bad news for anyone who has investments in the form of a With-Profit policy. These With-Profits policies are equity-linked saving schemes and due to the current turbulence in the stock market, it is natural for some people to want back their money by exiting this type of investment and cashing-in on the policy. However it does not seem to be convenient for the financial service providers as they would like to keep your money too!
To this effect, they are relying on their 'small print' to introduce a Market Value Reduction (MVR) or as some providers call it the market Value Adjustment (MVA)- the adjustment is only one way and that is downwards!
In an ideal world the With-Profit policies should smooth out the ups and downs as in the better years they build up some reserves so that they can be paid out in poor years. This does not seem to be the case for the majority of providers who are all relying on the MVR.
The Market Value Reductions that have come in force by all the providers are massive and they effectively 'kill' off your already dwindling investment. The providers have introduced whatever percentage deduction they see fit to 'stabilise' their fund, typically these are currently at around 20%.
For example- you have a policy where you have a valuation that states £20,000, however when you come to surrender this, the provider applies a typical Market Value Reduction and you only get back £16,000. The value of the investments have fallen and you get a MVR applied - a real double Whammy!
There are also many other individuals who have invested in bonds, hoping that they would provide a guaranteed income and /or capital growth. Most are now finding that they have next to nothing as a return on their investment and even in some cases that they have lost some of their initial capital.
The following is a list of bonds that are commonly problematic for some individuals
a) Fixed term Investment Bonds
b) Growth Bonds
c) High Income Bonds
d) Guaranteed Investment Bonds
e) Stock Market Guaranted Bonds
f) Capital Investment Bonds
If you wish to discuss a financial compensation claim on any investment and you believe you have been mis-sold/advised then contact me in confidence and I can put you in touch with experts who can assist.
email me on info@easy4life.com
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