Keydata founder Stewart Ford has urged the Financial Services Compensation Scheme to preserve the value of Lifemark’s portfolio so any compensation levies that fall on IFAs can be reimbursed.
Ford says Lifemark, the Luxemburg-based life settlement bond provider that £349m of UK investors’ savings were placed in via Keydata, contains value that could offset future levies.
Ford says: “The suggestion that the Lifemark portfolio has no value is clearly nonsense. This claim is a political move by the FSCS designed to back up the action the FSA took to shut down Lifemark part way through its business cycle, which has caused unnecessary financial hardship for so many elderly investors.
“My fear now is that, as the FSCS pays compensation and so steps into the shoes of the bondholders, it will not take advantage of the opportunity to use future returns from the Lifemark portfolio to reimburse the UK’s retail financial services firms for the increased FSCS levy they must bear as a result of this compensation.”
The FSCS announced on November 30 that it is considering Lifemark to have zero value, for the purposes of providing full compensation to Lifemark investors, up to its £48,000 limit per person.
FSCS claims in a single financial year, April to March, are likely to be paid for by a levy on the investment intermediary sub-class up to a limit of £100m, with further claims being paid by investment providers up to a total for the class of £370m.