The FCA has issued a warning that some investors who bought into the EEA Life Settlements fund have potentially been missold.
The EEA Life Settlements fund has been experiencing difficulties since December 2011 when the fund was first suspended after the FSA labelled life settlement funds as “high risk, toxic products.”
The regulator has now recommended that firms with clients who invested into the fund “re-examine their sales” amidst concerns over potential misselling.
The FCA raises particular concerns over with the reliability of calculations made for the fund on an individual’s life span.
The fund may also struggle to sell some of the life assurance policies before the death of the origin policyholder creating issues if extra funds need to be raised by the manager, according to the FCA.
The regulator also highlights the involvement of several firms in the running of the fund from different countries could risk the fair treatment of customers, while the complex structure of the fund itself may also be beyond the understanding of both the investor and the firm selling the product.
Customers are potentially risking losing “a significant amount of money” because the product can “fail entirely”, the FCA adds.
The regulator urges investors who have concerns over misselling to make a claim against the EEA Life Settlements fund quickly.
It says: “You may wish to make a complaint to the firm which sold you the investment or make a claim against it. However, there is only a limited time in which to do so and in some cases the deadline for making complaints or claims may start to expire from 1 December 2014 onwards.
“The deadline will vary and will depend on the facts and circumstances of each case – particularly when the sale or advice occurred and when the investor realised there was a problem.”