The boyfriend – a 29-year-old American named Lindell Lucy, who also teaches kindergarten in Hong Kong – has taken the cause of his girlfriend, Leung Chung-yan, to the South China Morning Post, among other media organisations, as well as to the internet, via a blog.
Last month the SCMP ran a story on the matter, featuring a photograph of Lucy and Leung, under the headline "Hong Kong consumers angry after being sold complex insurance product ILAS".
At issue, according to the story, was an investment plan Leung was sold by a Convoy Financial Services adviser, which she thought would help her deal with some unexpected medical bills, but in fact, the article claims, would lock up her money for 25 years.
The story made clear that although Leung was the one out-of-pocket, Lucy was the one who was in charge of the campaign to get it back.
In an email statement this morning, in an apparent response to an undisclosed settlement offer from Convoy, Lucy insisted that the money involved was secondary to other demands, which he said included "a genuine public apology” from the company, as well as a call for it to work with regulators and the industry to bring an end to the sale of ILAS products as they are now constituted.
Lucy’s email was addressed to eight top Convoy executives, and copied to more than 40 others, including Hong Kong regulators and journalists from such publications as the SCMP, Bloomberg and the Financial Times.
In a statement today, a Convoy spokesperson confirmed that the company had made Leung a settlement offer, "and now are waiting for her reply for further process".
Therefore, the spokesperson added, "it would not be appropriate for us to provide further comment", pending her response.
In an earlier comment, the spokesperson stressed that Convoy "treat[s] our clients as our No.1 priority at all times" and added: "As such, we have always been striving to provide excellent services with professional advice to our clients, in order to achieve their financial goals.
"In addition, we understand that Ms. Leung has lodged her complaint [with] various regulators/authorities, and we will fully cooperate with those regulators/authorities upon receipt of their enquiries."
In the SCMP article last month, Convoy defended its handling of Leung’s case, arguing that she had asked for a retirement plan, and had signed a document to that effect.
ILAS products under scrutiny
As reported, ILAS products have been the subject of criticism in the past, prompting Hong Kong’s regulators to look into ways of making them more transparent. Earlier this year, new regulations came into force that require those selling such products to disclose their commissions to their clients.
In 2012, the question of whether commissions ought to be disclosed was the subject of a landmark case in Hong Kong’s High Court brought by a senior executive with Li & Fung Group, a major Hong Kong conglomerate, against his insurance broker and Skandia, after he lost money in a Royal Skandia ILAS product. Although the executive, Jeremy Paul Egerton Hobbins, lost his case, the matter shone a spotlight on the subject of commissions, and the fact that many buyers of ILAS products were unaware of them or at least, how much they were.
Convoy, which is listed on the Hong Kong Stock Exchange and is said to be Hong Kong’s largest advisory firm, has been open about the importance of commissions to its business model. In its most recent annual report, it states that 89.9% of total revenue is derived from ILAS commissions.
