Investments  

Q: What are the pros and cons for advisers?

Mr Winders said: “The asset class is also relatively simple and can therefore be easily explained to clients, making the likelihood of any potential mis-selling claims very low.

“In the post RDR world, the interests of advisers and their clients are even more closely aligned.

“By giving clients an investment that provides very low volatility and high single digit returns, advisers will in most cases be fulfilling their duty to provide a product that is in the best interests of their clients.

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“And however an adviser chooses to be remunerated post RDR, some things will not change – namely that having happy clients will be a key part of their success.”

Cons:

Currently, most life settlements funds in the UK are classed as Unregulated Collective Investment Schemes (Ucis) and investors in them do not have access to the Financial Services Compensation Scheme.

Should a fund get into trouble, investors would be ineligible for compensation.

However, Peter Winders, marketing director of life settlement funds provider EEA, said many of the fund managers or distribution companies are themselves FSA regulated and pay the FSCS levy.

He said: “It should be noted also that unregulated does not equal more investment risk.”