Aviva property fund compensation

Discussion in 'Financial campaigns and consultations' started by trevork, 23 Oct 2012.

  1. trevork

    trevork Frequent Poster

    Posts:
    27
    I read today that Aviva would be compensating investors in the Aviva Irish property fund due to the losses it has incurred. This is as a result of poor decision making in taking out loans to repay leavers from the fund rather than selling assets in the fund. The friends first Irish commercial property fund has suffered similar losses. How could one pursue them to make similar compensation payments?
     
  2. werner

    werner Frequent Poster

    Posts:
    199
    Did Friends First make the same decisions as Aviva or was it just the collapse in property that resulted in the losses?
     
  3. LDFerguson

    LDFerguson Frequent Poster

    Posts:
    4,026
    This might be of interest to anyone who is considering making a complaint. In an unusual (and frankly welcome) move, Aviva have admitted that one of the decisions they made in relation to their Property Fund was a bad one and are offering compensation to investors in that fund. See here. I'd like to see other fund managers following this lead.

    While I welcome Aviva's move I think it's important to distinguish between a temporary fluctuation in an investment (which is to be expected with many investments) and a permanent loss caused specifically by the fund manager.
     
  4. Brendan Burgess

    Brendan Burgess Founder

    Posts:
    35,989
    I wasn't aware of this until someone mentioned it to me today.

    Was there much compensation paid? How was it calculated?
     
  5. mercman

    mercman Guest

    Brendan & others, this kind of compensation is a route that is / has been exercised by a number of non-Irish financial institutions. It is absolutely disgusting that a lead has been set by non Irish cos, but bigger mistakes made by the Irish Banks in both Irish and foreign property assets made by the Banks themselves go unnoticed.

    There are a number of threads on AAM which point directly to cases of mis selling and bad fund management which are heading to the Courts. With the new information coming to hand near daily, a good example of customer not to blame is been exercised. Hopefully the Irish Banks will realise that repaying the customers for the Banks own mistakes is fast becoming a reality.
     
  6. DerKaiser

    DerKaiser Frequent Poster

    Posts:
    1,442
    Mercman, I'd be interested in what you think the compensation is in respect of.
     
  7. Brendan Burgess

    Brendan Burgess Founder

    Posts:
    35,989
    Folks

    This thread is about the Aviva product. If you want to let off steam about stuff in general, please start a new thread.
     
  8. PMU

    PMU Frequent Poster

    Posts:
    903
    It wasn’t compensation for poor performance of the fund or anything like that. It was more of a rectification of a mistake or of less than best practice.

    In Dec 2012 Aviva wrote to investors in its Irish Property Fund saying that “In 2008 during a period of uncertainty in the Irish property market, we took steps to protect policyholders who invested in the Irish Property Fund. This however meant that we inadvertently disadvantaged some policyholders.”

    If you search back issues of the Irish Independent you can find out what happened. (I think the Indo was the only paper that covered it.) But basically, as far as I am aware, Trevork is correct; they took out loans to repay leavers from the fund rather than selling assets in the fund (which they couldn't do as the property market had frozen). Presumably this meant that those who remained in the fund had to pay subsequently for these loans.

    Aviva in December 2012 then adjusted each policy in the Irish Property Fund by increasing the number of units held. Other funds that invested in the Irish Property Fund also had their units adjusted.