Reply to: IFA firm want money back

[SueEllen]

For £350 hardly worth a legal battle is it.

Actually it is. It will only take a few postage stamps and short letters to get rid of them. I would not offer them anything at all.

If you refer the company to the financial ombudsman service the IFA has to pay a fee for the privilege of the financial ombudsman investigating them.

You tend to find that most financial companies will write off anything small where there is doubt that they will win because of the wording of their contract. They also don't want the consumer to be able to inform everyone what happened. The times they tend not to write off will be if it's actually related to a claim on the insurance policy.

[BlasterBates]

For £350 hardly worth a legal battle is it. It does say this in the contract, so other than your own sense of fairness you have no legal arguments at the moment, and to put together a legal argument would probably set you back more than £350. Send a letter justifying why shouldn't pay it and then offer £100. In the end you're going to have to pay probably.

[bobhope]

Really, why go to an IFA? - spend some time on a couple of personal finance websites

[tim123]

IFA's give you the option of paying them by using the fees only option or the commission only option. If you cancel the contract and they get a claw back, and it says it in their terms of business document that you signed and therefore agree to, then you are liable to pay them what they have lost.

But they are also required to give best advice.

A PHI scheme is often uesd as a fill in whilst someone is between 'real' jobs. Recommending one for the long term is almost certainly not going to be good advice.

tim

[malandri]

Well, I put the first letter in the bin, I received a second one a month later to which I replied that I am not going to pay them anything and if they insist on this I will compain to their regulator about the unclear clause. Haven't heard from them since (about 4 months now)

£350 is not much for me but there are better ways to spend it rather than handing it over like this...

[brianrhill]

Financial Adviser speaks!

IFA's give you the option of paying them by using the fees only option or the commission only option. If you cancel the contract and they get a claw back, and it says it in their terms of business document that you signed and therefore agree to, then you are liable to pay them what they have lost. If you had gone down the fee route and cancelled the policy a couple of years later, would you be looking for them to refund the fees you paid? If you did some work for someone and then they changed to a different provider several years later, would you expect them to ask for a refund? I think not! The Key Facts documents provided by IFA's are in a format that is approved by the FSA , so it's very unlikely you'll be able to prove an unfair contract. You would be much better going back to the IFA and get a new product - they will be more likely to let you off the claw back.

Brian

[threaded]

Yes, but the "cancellation notice" it refers to is a very different thing to cancelling policy under it's terms. But yes, whether the clause actually says that is a different thing.

The clauses intent and meaning is, in my view, fairly self evident. But whether it actually says that is highly debatable.

Given the standard of spelling in the IFA contract and it's lack of clarity I imagine it has never been near a legal review.

Considering the amount of inspection given to such things, I would suspect these are typing errors of the poster reading from the paper contract next to his keyboard, rather than actually spelling errors in the real thing. Now if these are actual spelling errors from the contract then I'd be asking a few questions of the IFA and the Life company they're representing, as there is a line of enquiry there as to what is the intention of this part of the contract.

[ASB]

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.

Yes, but the "cancellation notice" it refers to is a very different thing to cancelling policy under it's terms. But yes, whether the clause actually says that is a different thing.

The clauses intent and meaning is, in my view, fairly self evident. But whether it actually says that is highly debatable.

Given the standard of spelling in the IFA contract and it's lack of clarity I imagine it has never been near a legal review.

[Turion]

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.

Agree with this approach. All IFA are required by law to offer customers a fee-payment option. Ensures you get the best advice for you, and not what pays them highest commision.

[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.

[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.

[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.

[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.

[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).

[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?