Legacy business isn’t worth the hassle

Gary Mitchell

The wife is a higher rate taxpayer, the husband a basic rate taxpayer.

The wife wants to encash her bond, which has substantial gains. We informed her that if she assigns the policy to her husband and he subsequently encashes, there will be no tax to pay, thus saving a substantial amount. She instructed me to do this. Aviva requested we complete an assignment form first and provide them with AML (passport and driving licence) for both husband and wife, which we obtained and forwarded to Aviva with our letter of instruction. Aviva then stated we could only request a surrender form for the husband after the completion of the assignment.

The assignment was completed, so we rang for the surrender form – only to be told we were not the “servicing IFA”, even though no one else was. Aviva went on to state that it would be breaking the Data Protection Act if it dealt with us, and told us we would have to get authority from the husband or it would have to deal with him directly.

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This simple servicing matter has now cost us at least an additional hour in time that cannot be charged to the client. When compounded with other problems that we suffer every day, it is hardly surprising that IFAs refuse or dump legacy business – it is simply unprofitable.

The matter is still unresolved, since Aviva refuses to budge, despite my escalating this issue to a complaint. The client cannot understand what has gone on. Separately, Aviva contacted us to ask us to introduce more new business.

Gary Mitchell, Director, Sovereign (Financial Services), London

Right to reply

Aviva has robust processes in place to protect customers’ policy details, and we only disclose information where there is a clear authority to do so. This is the standard required and with which we must comply, and is consistent throughout the financial services industry. Where a policy is being transferred to a new owner, understandably that new owner must provide specific authority for that policy.