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Adviser feels misled by NU endowment maturity value row
A Wiltshire-based IFA has claimed that Norwich Union's change in projection calculations has led to an endowment misselling claim being brought against it, Money Mangement can reveal.
Dolly Pickering, of Heather, Moor & Edgecomb, was informed of a £6,000 drop in the value of a client's policy, caused by an improvement to the accuracy of estimated maturity value (EMV) calculations.
"Projections given to IFAs years ago were taken as given that they were 100% accurate and to be trusted. Now we're finding out that this is not the case," she said.
Pickering stated that it was unfair that IFAs were being punished for selling endowments policies whose initial projected values were inaccurate, and holds the providers responsible.
Gary Rowe, who works in the with profits department at Norwich Union, said that when a policy is sold, projections are not a guaranteed reflection of final maturity and that, as technology develops, the provider reviews and refines its methodologies for calculating EMVs.
"It's not sinister. Changes in markets and what is actually earned affect the assumptions made - that doesn't mean that, at the time a policy was sold, the projections were wrong," said Rowe.
He stated that the EMV calculation process is dictated by the FSA and that NU does its best to give customers the most accurate and realistic information on policies.
A spokesman for the regulator said that the EMV guidelines, known as the Projection Rate Rules, are fully TCF compliant and that they do not offer guarantees on investment.
Meanwhile, the Financial Ombudsman Service stated that while it could not comment on individual cases, the liability for recommendation of a product in cases like this lies solely with the adviser, and that the product provider has no duty of care in such situations.
gareth.shaw@ft.com
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