An adviser has urged Aviva to make its guidelines more clear about investing money from liquidated firms into Isas, after his client was left unable to invest £15,000.
According to communications seen by FT Adviser, Tim Morris, an IFA at Russell & Co had a client, Mrs E, who was invested in an LCF mini-bond which went into liquidation.
On April 16, Morris sent a confirmation from the High Court to Aviva that Mrs E and others involved would retain their £15,000 Isa allowance.
The client decided she wanted to invest the full £15,000 with Aviva.
Upon completing an application to invest the money, Morris contacted Aviva on May 9 where he was told Mrs E would be able to use her compensation payment to invest in an Isa even though she had maxed out this year’s allowance by using last year’s unused allowance.
Following this, on May 16 Morris spoke to another member of staff from Aviva who then said this would actually not be possible, stating that the High Court ruling document was not sufficient to process this.
Morris raised a complaint with Aviva that same day and on July 8 was sent an email from the provider stating that the complaint had still not been allocated to a complaint handler and he should wait until August 8 for a decision, according to the adviser.
Aviva’s response
A spokesperson for Aviva said: “When Mr Morris called Aviva on May 9 2024, he was told that it would be possible to use [Mrs E’s] compensation payment to invest in an Isa, over and above this year’s allowance, by using last year’s unused allowance. Unfortunately, this is incorrect.
“While it is possible to contribute over and above the current year’s Isa allowance where compensation has been received, this can only be done in specific circumstances.
“One of these [circumstances] is that the compensation payment being used to reinvest in an Isa must have been made no more than 180 days before the replacement investment. We understand that his client received her compensation payment in May 2022."
"This means that the time frame had passed by the time Mr Morris approached us to invest his client’s payment into the Isa and so Aviva was unable to proceed.
“We’d like to apologise to Mr Morris for the misunderstanding and that we were not clearer about the restrictions that applied in this case.”
According to Morris, when he had submitted the application with Aviva, a deadline had not been mentioned nor was it discussed during the phone calls he had with the provider.
He has urged for these guidelines to be made more clearer and widely known to its staff members to prevent a similar case occurring again.
In a response to Aviva, Morris said: “I now understand there was a 180-day limit; it’s a shame your staff didn’t. Sadly my client didn’t have the paperwork to confirm this and due to a lot of turmoil happening in her life in the last couple of years, did not recollect it.
