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IFAs’ views sought for life settlements rulebook

IFAs who use life settlement funds have been asked to participate in research into market practices


The European Life Settlement Association (ELSA) said the findings of the consultation would help inform a life settlement code of practice it was devising for the industry.

The association said it wanted feedback from IFAs in particular as a result of the UK regulator, the FSA, raising questions about the life settlement asset class earlier this year.

The FSA had highlighted various risks it believed existed in the life settlements sector, in areas such as volatility in the asset class relating to factors such as longevity of underlying policyholders, liquidity and, most crucially for the IFA market, how investors were sold the products and how well they understood them.

The regulator brought up the issue following the high-profile collapse of life settlement schemes offered by Keydata and Lifemark.

The Association of Independent Financial Advisers (AIFA) has agreed to seek the opinions of its members on behalf of ELSA, though all advisers, whether AIFA members or not, have been invited to submit their views. They can do this via an online questionnaire.

Patrick McAdams, investment director at SL Investment Management and ELSA chairman, said: “Intermediaries are rightly looking much more closely at product structures and wishing for greater transparency than ever.
“We intend to use this IFA consultation as a valuable feedback mechanism to ensure that we cover in our comprehensive code all the critical issues for this market. Separately, we have given the FSA sight of a draft of the Code, ahead of the response from IFAs, to ensure it is moving in the right direction.”

The consultation can be accessed at the following:

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