FSAVC Mis-selling

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FSAVC Mis-selling

FSAVC policies are very similar to personal pensions. You pay your contributions into an investment fund and the final pension is determined by the performance of the assets in the fund (usually company shares).

FSAVC policies had two major flaws:

  1. Charges were high in order to pay the salesman’s commission and to cover the costs of administration and provide a profit to the insurer
  2. The investment performance was often very poor

People sold FSAVC policies were often not told about the alternative of paying their additional pension contributions directly into their employer’s pension scheme. This had two major advantages over FSAVCs:

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    Benefits of an in-house AVC

    Firstly, the costs were substantially lower, thus more money was available to build up the extra pension. Company schemes would usually subsidize the costs of administration and no salesman’s commission was payable.

    Secondly, members of public sector pension scheme were able to buy extra years of service. The pensions of such public sector professionals such as teachers, doctors and dentists are based on a proportion of the person’s final salary at retirement. The exact proportion is determined by length of service.

    Pension funds built up from buying “added years” of service are not subject to risky investment performance and thus tend to provide much higher levels of retirement income than FSAVC policies.

    Think you have been mis-sold?

    Greg can help you get the compensation that you are entitled to. With over a decade of experience, Greg has won millions of pounds of compensation for hundreds of happy customers, with life-changing amounts up to £90,000 in some cases. You can read some client feedback here.

    After reading the information on this page, if you feel you have been mis-sold an FSAVC, please fill out the form opposite to get started. If you are still unsure, please take the “FSAVC 60 second Mis-selling Test” below.

    FSAVC Mis-selling Checklist

    Question 1 of 6

    At the time of sale, did the financial adviser tell you that your company scheme would also let you pay in additional voluntary contributions (AVCs)?

    Question 2 of 6

    Did the financial adviser discuss the differences between FSAVCs and AVCs?

    Question 3 of 6

    Did the financial adviser recommend that you approach the administrator of your company scheme to get more information about AVCs before you made a decision to pay FSAVCs?

    Question 4 of 6

    Did the adviser discuss the differences in charges between an FSAVC and in-house AVC?

    Question 5 of 6

    Did the adviser discuss the differences in the choice of investment funds under an FSAVC and in-house AVC?

    Question 6 of 6

    Did the financial adviser compare illustrations for the FSAVC and AVC to see which would provide the higher pension?

    You have completed the FSAVC Mis-selling check.

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    Find out if you have been mis-sold. Download our simple FSAVC checklist.

    I fight hard to get the best compensation for my clients, with payouts of up to £90,000. Here are some of the wins!