IFA firm want money back

[TheFaQQer]

"if you subsequently cease to pay premiums on the policy and in consequence we are obliged to refund commision that has been paid to us, we reserve the right to charge you a fee based on no more then the amount of commision we are required to return to the company but we will not charge you a fee if you exercise the right to cancel the policy in accordance with the cancellation notice sent to you by the life office"

OK, slightly more serious answer.....

The second clause (which I've highlighted in bold) seems to imply that if you cancel the policy according to the terms of the contract (e.g. the contract says that you need to give a month's notice rather than just stopping payment) then they won't come after you for the money.

Did you follow the terms of the cancellation, or did you just stop paying it? If you've cancelled it according to the T&Cs, then you should have nothing to worry about. If you didn't follow the cancellation guidelines, then you should pay up and learn from the experience.

[Turion]

The problem here is that the T&C's will likely stipulate the period after which the policy can be cancelled rather than the notice period. In other words the contract can be cancelled penalty free after the IFA has received all his dosh from the insurer, which could be 5 or more years.

[NotAllThere]

... They didn't tell me that I would have to pay a portion of the commission if I canceled my policy...

Well, from what you've quoted from the contract, they told you precisely that.

""if you subsequently cease to pay premiums on the policy and in consequence we are obliged to refund commision that has been paid to us, we reserve the right to charge you a fee based on no more then the amount of commision we are required to return to the company"

[Gonzo]

OK, slightly more serious answer.....

The second clause (which I've highlighted in bold) seems to imply that if you cancel the policy according to the terms of the contract (e.g. the contract says that you need to give a month's notice rather than just stopping payment) then they won't come after you for the money.

Did you follow the terms of the cancellation, or did you just stop paying it? If you've cancelled it according to the T&Cs, then you should have nothing to worry about. If you didn't follow the cancellation guidelines, then you should pay up and learn from the experience.

That particular clause refers to the standard cooling off period that all financial services products have to have.

i.e. you can change your mind and get your money back for the first 14 days after entering into the contract.

(The rules are in practice more complicated than that, but this will do for the purposes of this discussion.)

[SueEllen]

In other words the contract can be cancelled penalty free after the IFA has received all his dosh from the insurer, which could be 5 or more years.

It's very likely the contract doesn't state anything of the sort.

Does the contract mention anything about policy reviews?

[ASB]

OK, slightly more serious answer.....

The second clause (which I've highlighted in bold) seems to imply that if you cancel the policy according to the terms of the contract (e.g. the contract says that you need to give a month's notice rather than just stopping payment) then they won't come after you for the money.

Did you follow the terms of the cancellation, or did you just stop paying it? If you've cancelled it according to the T&Cs, then you should have nothing to worry about. If you didn't follow the cancellation guidelines, then you should pay up and learn from the experience.

I would think that is is more likely that is referring to the 14 day "cooling off" type period.

However given people can't really agree very well on what it might mean it does seem there is some ambiguity and it might just be judged unfair and struck out (though I doubt it).

[TheFaQQer]

I would think that is is more likely that is referring to the 14 day "cooling off" type period.

However given people can't really agree very well on what it might mean it does seem there is some ambiguity and it might just be judged unfair and struck out (though I doubt it).

Quite possibly - but if there is a cancellation clause in the policy that applies, then as long as the OP followed the procedure then the IFA can't charge them.

[dude69]

seems wrong to me. The IFA is paid commission, not a fee.

By its nature sometimes you win, sometimes you lose. I.e. sometimes they get it paid for 10 years sometimes for 1 year.

Continue to bin the letters until they came up with something more substantial.

Waste not your time.

[threaded]

Dear all,

I bought a Permanent Health Insurance ...

Shortly after cancelling the policy, the IFA that arranged the Friends Provident policy for me 2.5 years ago sent me a letter saying that because I cancelled the policy, Friends Provident asked for a partial refund of the commision they paid to them (£350) and therefore , as per their terms of business that I signed 2.5 years ago, I have to pay them this money. In their copy of their terms of bussiness, I have indeed signed that

Another good reason for all you out there in contractor land to only work with IFAs who will be paid up front. This commision only stuff bites in the end, one way or another.

[threaded]

Also interesting is that the IFA firm you took up with took their payment up front from the Life company. IIRC they get a better payment if they take it over the first few years, and best if they take it over the life of the policy.