EEA: Speak to advisers over mis-selling of our fund, not us

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EEA has told any investors unhappy with their holdings in the group's life settlements fund to consider making claims against financial advisers, and not to pursue the fund group itself.

Responding a day after the Financial Conduct Authority urged investors who bought EEA's Life Settlements fund to complain, EEA Group said investors should send any complaints they may have to financial advisers who had sold the group's funds.

EEA said it had not provided advice to retail investors in the UK, but instead had marketed the fund to institutional investors and independent financial advisers.

As such, any customers with complaints should pursue their advisers, it said.

"If there are instances where products have been mis-sold by an IFA, then it may well be appropriate for an investor to consider making a claim against the IFA in the manner suggested by the FCA in its announcement."

It added: "We would like to take this opportunity to clarify that neither EEA Fund Management Limited ("EEA"), which is the Fund's marketing agent, nor EEA Fund Management (Guernsey) Limited, the Fund's manager, have ever provided advice to retail investors in the UK."

At the centre of the FCA's concerns are EEA's funds of traded life policies (TLPIs). The FCA launched a probe into this asset class in 2012, and concluded some investors are "likely to have been mis-sold the product”.

Ahead of the deadline for complaints, it has asked advisers to make sure they complied with a Financial Services Authority request in 2012 to review their sales of the products.

The FCA is now asking advisers to re-examine their sales of the EEA Life Settlements fund in particular, an unregulated collective investment scheme made up of TLPIs. Where significant mis-selling is discovered, it urged firms to contact their supervisor at the FCA.

It said yesterday: "If firms do not act on our guidance, they may be failing to pay due regard to the interests of their customers or to treat them fairly, which could lead to regulatory action."

The EEA Life Settlements Fund is an unregulated collective investment scheme made up of TLPIs, typically of US citizens.

The fund - listed on the Channel Islands Stock Exchange - was suspended in 2011 after "unprecedented" levels of redemption requests sparked by the regulator's announcement it would seek to ban the sale and marketing of traded life policy investments to retail investors - something it subsequently did. It was eventually restructured earlier this year.

In the regulator's view, TLPIs are high-risk investments because they rely on calculating how long the policyholders will live, which is easy to get wrong.

The asset class also has a lack of liquidity and extra complexity, due to the fact several firms in different countries are taking responsibility for different parts of the product.

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