EEA suspends dealing in life settlements fund

Readers' comments (20)

• Anonymous | 1 Dec 2011 11:01 am

  Got to love panicing investors pulling out of a potentially good fund (not reviewed) to make it fail....

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• sadly loads of big firms gor caught up with these | 1 Dec 2011 11:09 am

  i remember some Thinc guys had these as core holdings
  
  
  There is some way to run on the compensation i suspect

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• Ian Coley | 1 Dec 2011 11:11 am

  May I be one of the first on here to congratulate the FSA on driving a nail into its own coffin, in addition to creating untold problems for advisers and clients alike through publicising its hysterical intentions on these funds.
  
  I would also like to congratulate those4 journos and investment professionals who helped fan the flames.
  
  I predicted a couple of days ago that the way in which this issue had been handled would lead to a self-fulfilling prophesy.
  
  It gives me no pleasure in saying that I told you so.
  
  Ian Coley
  Partner
  Medical Investment Services

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• Clive Moore | 1 Dec 2011 11:26 am

  To be fair to the FSA, they've been rumbling on about Life Settlement Funds for well over a year, which should have been long enough for advisers to take the hint.
  
  If the valuations of this fund have been accurate (even though the performance suggests mark to model rather than mark to market) there shouldn't be a problem dealing with redemptions.
  
  If, however, the assets are largely illiquid with a limited secondary market, this should have been run as a closed-ended fund.
  
  Regardless, advisers and clients who think they can get a steady 9% a year return (on top of fat commissions) in the current environment probably need to pay a bit more attention.

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• Ned | 1 Dec 2011 11:27 am

  Another charge from the FSCS will be the intended consequence if any investors cannot get their money back.
  
  The FSA has to stop ruining our industry with its ill considered, idiotic, ill informed, badly researched and totally inaccurate commentary on products.
  
  If we are to have product regulation and approval then let us have it, not this back door, not our problem lamentable behaviour by a so called "world class regulator"
  
  No wonder consumers don't really trust the industry, it is because the regulator has no common sense, anyone with half a brain could see this coming about.

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• Richard | 1 Dec 2011 11:45 am

  I would love to have the time to research to conclusion my following statement.
  
  But at face value:-
  It apears the largest contributor to consumer detriment is the FSA itself.

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• Anonymous | 1 Dec 2011 11:49 am

  Unfortunately Clive People don't die to order. Left alone as long as the policy has been purchased at the right price the rest falls into place over time. The FSA are a shambles. Yes steady returns despite all these 'high charges' etc. Is this the real reason the FSA label this as Toxic?

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• andy | 1 Dec 2011 1:12 pm

  I agree with Clive, this asset class was widely promoted as being a low risk core holding for pretty much anyone, forgive me for my old fashioned approach but I'd have thought that Equities, Bonds and Cash represent retail client investments and not Life Policies on US residents wrapped up in a structure who's valuation model is almost impossible to understand by even the most qualified amongst us....Timber Funds, Recycling Funds, Land Funds .....watch this space advisers!

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• Anonymous | 1 Dec 2011 1:55 pm

  Not having transacted any of these Life Settlement funds, doesn't stop my bemusement, each side of the argument has its own merits, but I cannot stop thinking, death & taxes are the given certainties in life, we're all very much aware of the taxes at present and of course death is inevitable. Consequently, providing the premiums are continued, which are stated as sustainable as well as being auditable, the actuaries will not be far out on life expectancy, leads me to believe the only problem is the FSA! I may be wrong, we'll find out wont we, but I would ask you to recall the pension transfer costs incurred by our industry, I would ask are these final salary schemes doing what they said originally on the tin or is there some spillage? I will leave you to contemplate this and place the FSA in the equation in both calculations!

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• Peter Turner | 1 Dec 2011 2:07 pm

  I can't help thinking that making a statement that was likely to induce panic was a really stupid thing to do.
  
  Nor can I help thinking that whoever said it must have known it was a really stupid thing to do.

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