EEA Life Settlements Fund Claims

The only thing certain about the EEA Life Settlements Fund is that the disappointment Fund, marketed as offering stable and consistent returns in retirement, has been frozen since 2011.

It was Benjamin Franklin who first coined the phrase, “In this world nothing can be said to be certain, except death and taxes.” Many investors in the EEA Life Settlements Fund were convinced by their professional advisers that this was an axiom that applied to a lucrative investment opportunity – a Fund where consistent returns of between 8-10% per annum could be achieved on a stable long-term basis. However, in the vast majority of cases, the advice turned out to be bogus. Thousands of investors have been left disappointed and unable to access their money since November 2011.

The EEA Life Settlements Fund was an Unregulated Collective Investment Scheme (“UCIS”) which commenced in January 2006. The EEA Life Settlements Fund was based in Guernsey and was previously listed on the Channel Islands Securities Exchange; nevertheless, many UK-based financial advisers routinely recommended the EEA Life Settlements Fund to their customers, often in return for significant commissions.

In the vast majority of cases, the advice turned out to be bogus. Thousands of investors have been left disappointed and unable to access their money since November 2011.

The EEA Life Settlements Fund operates by purchasing and subsequently trading the death benefits of life assurance policies of seriously or terminally ill individuals in the United States. The policies were purchased by the EEA Life Settlements Fund at a discount from the face value. The Fund profited when the eventual benefit (i.e. the sum paid out when the individual died) exceeded the initial cost paid for the policy. This type of fund is known as a Traded Life Policy Investment (“TLPI”).

Investors were advised that the EEA Life Settlements Fund provided a low-risk asset solution with the prospect of stable and consistent returns, totally uncorrelated to traditional market investments. This was an attractive proposition to investors wary of the volatility of the stock market, especially those looking for a safe and secure home for their life savings, as well as income to supplement their pension provision.

In fact, TLPIs such as the EEA Life Settlements Fund were high-risk investments. In particular, they used complex investment strategies based on calculations about how long people would live. With medical advancements and people living longer, these calculations could easily be proven wrong, meaning that the strategy would not work as promised and returns would be much lower than expected.

On 28 November 2011, the Financial Conduct Authority (FCA) published draft guidance and commentary on TLPI’s like the EEA Life Settlements Fund. The FCA found that TLPI’s were often negligently marketed and promoted as offering strong returns that were unrelated to stock market performance, which made them appear attractive at a time when more traditional investments were not doing so well.

The FCA’s research also found that TLPI’s, including the EEA Life Settlements Fund, were complex products with a number of inherent risks. In our view, this should not have come as a surprise to financial advisers. As early as 2003, Shepherds Select Funds, based in the Isle of Man, collapsed. One of Shepherd’s Select’s funds invested in TLPI’s and it was reported in the financial press in 2006 that investors faced a delay of up to seven years in accessing their investment, together with the possibility of a complete loss of their funds.

The FCA’s research also found that TLPI’s, including the EEA Life Settlements Fund, were complex products with a number of inherent risks. In our view, this should not have come as a surprise to financial advisers.

In November/December 2011, the managers of the EEA Life Settlements Fund suspended redemptions, purchases and conversions of shares in the Fund due to illiquidity, after an unprecedented surge in the number of investors seeking to recover their monies, following the FCA announcement.

Now the Fund is frozen, and investors have been unable to access their savings. There is presently no indication as to when they will be able to do so in the future. Many of our clients were low-risk investors approaching retirement who required a certain income to be realised from their life savings in order to support their daily needs. They were wholly unsuited to invest in the EEA Life Settlements Fund, which was of a high-risk and specialist nature.

As the EEA Life Settlements Fund was a UCIS based in Guernsey, investors often have limited or no recourse to the Financial Services Compensation Scheme (FSCS) if things go wrong and such products fail. They may also not be covered by the Financial Ombudsman Service (FOS) if they have a complaint.

Neglect Assist are acting for several victims of the EEE Life Settlements Fund and have been successful in recovering losses and securing compensation from IFA’s (and their insurers) who negligently recommended this investment.

We can offer a genuine No Win, No Fee agreement.

What Do We Charge?

We offer an absolute and guaranteed No Win, No Fee agreement; it’s that simple. If successful, we take a fee of up to 20% (plus 4% VAT) * Of the award of compensation. If unsuccessful, our clients pay us nothing.

* We reserve the right to apply a deduction in more complex or higher risk cases of up to 30% plus VAT. Typical examples might be where there are multiple parties to claim against, where time limits for claiming may have passed or new areas of law are tested.