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Hi there- just king for a little advise on a matter regarding insurance through an independant financial advisor.
3 yrs ago tok out a mortgage, Life Insurance as well as building and contents through an Independant financial advisor. After the tie in period on the mortgage which was only 2 yrs we changed after shopping about and got a good deal with Abbey. So I cancelled mortgage and all policies.
The problem comes with the life insurance policy- I cancelled it through norwich union which they said was fine. We were not informed of any sort of tie in period on a life insurance policy and norwich union did not seem to have a problem when we cancelled.
Just got a letter from financial advisor- stating you should have come to us before shopping about blah, blah with a letter enclosed from Norwich union to him asking for unearned commission back (it does not state anyhting about an early cancellation or such) and then on his letter which has a different amount than the 1st letter he sent saying
"On a personal note as discussed when your mortgage was arranged I did not charge a fee on the understanding that the required life insurance was arranged through this office and any commission paid was then offset for my time spent in arranging your affairs"- which was not stated to us - just his advice was free and he got commission
"As you have cancelled the contract within 4 years norwich union will reclaim £XXXX from me. If however you do not wish to continue the policy please forward me a cheque for £XXXmade payable toXXXx
AS this time you may feel the above request is unfair, however, please bear in mind that it would be unreasonable on your part to have your affairs arranged by this office without due payment for time and services provided."
We have requested written confirmation of what we signed stating we agreed to keep a policy with norwich union for 4 years when they do not seem to mind when we cancel. Also that if we cancelled that we would be due to pay any fees?
Bearing in mind this place has recieved commission on a mortgae 1 yr over it's tie in period along with both insurances I believe it has been compensated adequately.
I would like to know if this is a standard tactic by IFA's, Is this legal?
As he is treatening small claims court would it be likely to stand if we have not signed anything?
If he was successful in small claims would it affect my credit ref?
Any help would be useful sorry for the prolonged explanantion
There appears to be a lot of this going on as the same question keeps popping up at Moneysavingexpert.com. The response seems to be that it is not allowed unless you have signed a fee agreement with the IFA.
Hi Pagan,
Thanks a million- we are going to try and get any paperwork he may have on monday as we do not have any copies of any agreements with him- I am positive we did not agree to such a thing otherwise we would have stayed well clear of anything involving a fee agreement of any sort.
I'm an IFA. This guy is totally out of order if you haven't expressly agreed to commission in lieu of fees and have also signed an agreement to that effect (and specifically agreeing to repay commission if you cancel any policy)
Tell him to either go away or provide you a copy of the agreement you signed. if he persists in this claim, tell him you will be making a complaint.
Do you know if he's regulated directly with the FSA or via a network/Company. If you're not sure, you can find out on the FSA website by searching on the register.
It's idiots like that that give other Advisers a bad name.
Independant Financial advisor dirty tricks
, Life Insurance
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