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Another MVA by Equitable

Equitable Life has slapped a market value adjuster on yet another set of policyholders who have so far managed to escape the 10 per cent penalty on early transfers.

Retirement annuity pension policyholders over 50 wanting to take benefits before their contractual retirement age of 60 had been allowed to transfer in to a personal pension without the 10 per cent MVA hit.

The MVA was waived as an incentive for policyholders to transfer and give up their guarantees. But the guarantees have been removed through the compromise deal and Equitable will charge an MVA on these transfers.

Equitable is also tightening up procedures on group surrenders, where MVAs were applied according to specific factors for that scheme.

IFAs are still seething from Equitable&#39s slur that they may be lining their own pockets by recommending transfers.

Writing in Money Marketing this week, Informed Choice managing director Nick Bamford says: “What is missed by the chairman and chief exec-utive in their ivory towers is that the demand for transfer advice is driven by Equitable policyholders.”

Torquil Clark has challenged the life office&#39s chairman Vanni Treves to show what benefits there are in keeping an Equitable with-profits policy compared with one of his firm&#39s recommendations.

In a letter to Treves, Torquil head of research Tom McPhail says: “We believe an investment recommended by ourselves, with a similar risk profile, is capable of delivering better returns, even allowing for any policy charges.”

An Equitable spokesman says: “It is our responsibility to alert policyholders of the full cost of transferring. In the current low-inflationary, low-return environment, it will take a long time to make up the cost.”


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