Rockingham raises Rita risk rating
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Rockingham Retirement has increased the risk rating on its Rita Sipp and has confirmed that the FSA has looked into the product as part of its review of traded life settlements.
In March, Money Marketing highlighted adviser concerns that the firm was understating the risks of traded life settlements in its marketing literature for the retirement income tri-investment account.
The literature from Rockingham which raised concern at the time said: “There is a small element of risk but the level of risk is probably significantly less than the risks you have taken in the past with your pension fund and the rewards are quite significant.”
Rockingham Retirement has now increased the product’s rating from low to medium to medium risk but insists the change was not prompted by the FSA. The firm has also added the Metlife 10-year guaranteed income bond. Rita previously offered a cash deposit account, Prudential’s with-profits trustee investment plan and the ARM assured income plan - a life settlement fund paying fixed interest. The company says the ARM product is not currently being promoted as its jurisdiction is being transferred to Ireland.
Managing director Steve Hunt says: “The FSA has been doing the rounds on all life settlements, given the event of Keydata. We have done our own extremely extensive due diligence of the ARM bond and we are more than happy with it the way it is being managed and its returns.”
In February, the FSA revealed it had “significant concerns” about the way in which life settlement policies were being brought to market, adding it had uncovered “major flaws” in the marketing of the products. It said it would be closely monitoring the quality of marketing literature from providers.
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