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Warning as EEA investors may have been mis-sold

Warning as EEA investors may have been mis-sold

Category: Investments

Updated: 26/09/2014
First Published: 26/09/2014

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The Financial Conduct Authority (FCA) has urged anyone who invested in the EEA Life Settlements Fund to contact their financial adviser and consider making a complaint, as it believes some were likely to have been mis-sold the scheme.

What's the problem?

The EEA Life Settlements Fund is what's known as an unregulated collective investment scheme, made up of traded life insurance policies (TLPIs). These are complicated products that the FCA believes are unsuitable for the mass market, and after a 2012 review of sales in the TLPI market, they identified high levels of unsuitable advice and potential mis-selling to retail investors.

As a result, they recommended that these products shouldn't reach ordinary retail investors in the UK – they're designed for institutional investors, said the EEA fund itself, and should never have been promoted to the retail market – and in January this year, they imposed rules which all-out banned the promotion of TLPIs to most retail investors, either directly or through financial advisers.

So, given the complexity of the products, and the FCA's concerns over their suitability – not to mention the amount of poor advice uncovered – there's a very real chance that you were mis-sold to.

What should I do if I invested?

If you were advised to invest in the fund and would like to make a complaint, the FCA says that you should contact the firm that arranged the investment on your behalf (if the firm has gone out of business, contact the Financial Services Compensation Scheme). You should raise your concerns with your adviser and ask for the sale to be reviewed – under strict FCA rules, the adviser should have a procedure to follow in order to resolve things in a timely manner.

After you've made the complaint, the adviser will review the sale and check that it complied with regulations. If it was mis-sold, they should decide what redress will be appropriate. If you're not satisfied with the answer or feel that your complaint wasn't properly dealt with, you can take your complaint to the Financial Ombudsman Service.

Alternatively, if you invested in the fund independently without receiving regulated advice, you may wish to seek independent advice on what your options may be. The EEA fund itself has urged investors to not go directly to them, maintaining that it never offered advice to the retail market.

What now?

Get started! You'll need to be quick if you want to make a complaint, as there's only a limited time in which to do so. In some cases the deadline for making claims may start to expire from 1 December – the deadline will vary depending on the specific circumstances of each case – so those who wish to make a complaint should contact their adviser before it's too late.

What next?

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.