We regarded them as extremely high risk and suitable only for those with large sums to gamble who were taking personal independent advice. Essentially investors were betting on how quickly Americans would die.
By 2005 there was evidence, reported in the professional press, of fraud by policyholders who pretended to be more sick than they really were in order to cash in on their policies.
Well, the inevitable happened. The fund was suspended in the autumn of 2008.
When I was contacted the pensioner, now in her mid 70s, had no idea where her money was and had not heard from her financial adviser in years. I had to tell her the fund was now in the hands of administrators and assets were about 35p in the £1.
A director of the fund told me they have been sending updates to financial advisers who mainly sold the fund as part of portfolio bonds – and these should have been passed on.
Her best hope now is to pursue a mis-selling case against the adviser who, I suspect, was either greedy or clueless.
You might ask, as I did, about the appropriateness of the investment for a pensioner of restricted means and whether there was any balance in the portfolio to counteract the risk being taken?
I am sure the Financial Ombudsman will pose the same questions.
Earlier this month the Association of British Insurers announced that charges taken from workplace pensions will be disclosed to investors in real money – that is, pounds and pennies rather than in percentage terms.
The changes will be phased in between summer 2014 and the end of 2015.
I have waited with bated breath for a similar announcement from the unit trust industry. Instead we have silence. Unit trust managers, for some reason, find it too difficult to tell their investors how much money they are taking in terms they would understand.
If they really cannot carry out these calculations it leaves me wondering how they organise their accounts and calculate their profits.
Indeed, as an investor, I wonder how such a disorganised industry can make any money at all.
Tony Hazell writes for the Daily Mail’s Money Mail. Email:firstname.lastname@example.org