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IFAs could face action over Eurolife secured bond

IFAs who sold Eurolife secured bonds in the late 1990s could face action from the Financial Ombudsman Service after Eurolife went into administration last week.

The secured bond, set up in 1999, was sold exclusively through advisers.

The firm had to offer 2,300 investors a compromise deal 18 months ago when it became clear that they would not get back their capital.

Investors could accept a reduced lump sum in compensation but 2,000 investors opted for staggered, reduced payments ending in 2009.

Administrator FA Simms and Partners was called in last week when the firm could not afford a 700,000 pay- ment due to bondholders next month.

The Financial Services Compensation Scheme says it cannot investigate claims against Eurolife because it is not regulated by the FSA but it will look into claims against insolvent IFAs that missold the products.

FOS spokesman David Cresswell says: “We are not sure how many complaints will come out of the woodwork.”

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