Spottiswoode replies to angry adviser
CLAIRE Spottiswoode, responsible for representing the interests of with-profits policyholders at Aviva, has issued a letter in response to one published in City PM questioning the insurer’s treatment of its investors.
The Policyholder Advocate, formerly head of Ofgas, has defended a deal she struck over the group’s reattribution of a £1.4bn inherited estate controlled by Norwich Union, which will be formally known as Aviva on Monday.
Spottiswoode’s letter, shown in full on the right, was sent after financial adviser David Trenner said he was at a loss over what to tell his 82-year-old mother about the situation.
He pointed out the group has undertaken a high-cost rebranding campaign while at the same time slashing policyholder payouts.
In the response, Spottiswoode sends her best wishes to Trenner’s mum, who will soon be faced with a vote to participate in a cash payout from the estate – hoarded by Norwich Union during good years – thereby giving up rights to future payouts from the pot.
Many of the roughly 1m policyholders affected are thought to be wary of the terms of the deal.
Glasgow-based adviser Trenner said he was pleased to receive the letter, after previous correspondences were responded to with “meaningless bumpf”. “Claire has done as much as she can with her hands tied behind her back by the Financial Services Authority – she hasn’t been a pushover,” he said. “But, only time will tell in future whether this deal was a sound thing to do.”
Dear Ms Spottiswoode
I am an IFA who joined the pensions profession in 1977. My mother who is 82 is a Norwich Union with profits policyholder.
When the pile of bumph from Aviva/yourself comes through my mother’s door she will no doubt pass it to me to tell her what to do. What can I tell her?
&9679; I can tell her that Aviva has spent millions changing its name from the one she has a policy with.
&9679; I can tell her that Aviva has spent more millions going through a three-year consultation process on reattribution.
&9679; I can tell her that your office has spent millions on salaries and expenses on your side of the process.
&9679; I can tell her that you have expressed disappointment in the FSA for allowing Aviva to spend her money on various things which you feel they should not be allowed to spend it on.
&9679; I can tell her that whatever she gets shareholders will get more of her money.
&9679; Or I could just tell her that £500 (or whatever it is) is cash which she could spend on her grandchildren – and that it will not be subject to an MVR unlike the rest of her policy.
What would you do in my position?
Yours sincerely
David Trenner
Technical Director
‘Dear Mr. Trenner,
You asked me what you should tell your mother about the Aviva offer that will soon be sent to her.
&9679; Please tell her that the inherited estate that is at the heart of this offer has not been contributed to by her or other current policyholders or shareholders
&9679; Remind her that as long as she is eligible ( and I assume she is) she is already benefiting from a share of £2.1 billion which is being added as a bonus to her policy from the estate
&9679; Tell her that because of this the chance of future such payouts is low and that in the years ahead might only amount to £100 million shared between policyholders – and overall the offer is five times that amount
&9679; You could mention that any payment will be in cash and tax free, because the tax people regard this as a windfall
&9679; You would want to reassure her that the estate remains to provide support for her policy
&9679; It is important to emphasise that all her main policy provisions stay the same as they are now
&9679; You could tell her that if she doesn’t want to take the money she keeps all her rights to any future special payouts
&9679; You will make sure she knows that if she wants to take the money she has to vote – this is not something decided by majority vote
&9679; You could also tell her that Aviva shareholders are paying for the all the costs of my office
Most importantly of all you could send her my best wishes for good health and happiness, and that I am sure she will make the right decision for her and her grandchildren.
That’s what I have been working for, giving policyholders a genuine choice and protection.
Yours sincerely
Clare Spottiswoode CBE
policyholder advocate