Clarke Willmott Partner, Laura Robinson, is a dual-qualified solicitor and financial adviser (non-practising), who has successfully acted for dozens of individuals who invested in a various different bonds and suffered losses as a result.
The UK’s Financial Conduct Authority (“FCA”) recently issued a sharp warning to potential investors: be cautious when enticed by high-return opportunities. The FCA highlighted unlisted loan notes and mini-bonds in particular, both of which have been responsible for major investor losses in recent years.
In this article, Clarke Willmott partner Laura Robinson focuses on investment bonds – the risks and why clients have been drawn into these unregulated investments unwittingly. In case you missed it, her last article looked at loan notes and mini-bonds.
Investment bonds
An investment bond is very different from a gilt, loan note or mini-bond. Structured as a single-premium whole of life insurance policy, an investment bond effectively acts as a tax-efficient wrapper for investments. Investment bonds are very common and can be suitable for many people because of their tax advantages. The risk is primarily associated with the underlying investments, which should meet the particular investor’s needs and be within the level of risk they are prepared to take.
Laura Robinson has specialised exclusively in financial services disputes at Clarke Willmott for almost 15 years. At the outset of her successful career, she and the team represented Mr Rubenstein, who was successful in the Court of Appeal. The case concerned the AIG Premier Access Bond (an investment bond) and, within it, the ‘enhanced’ fund. The enhanced fund was widely sold as ‘cash’ or ‘cash style’ by various banks to customers who wanted liquidity. However, it had assets within it that were far from cash; some had maturity dates of 5 years, making them illiquid. A run on the fund in late 2008 revealed the fund’s illiquidity and withdrawals were suspended, leaving investors unable to access their “cash”. Whilst the bond itself was not problematic, the underlying fund was mis-sold as being “cash”.
Sometimes, investment bonds are used as wrappers for high-risk, toxic investments. The team recently and successfully concluded a case in which investments in traded life policies (‘death bonds’) were made within an offshore investment bond. Again, the bond itself was not the issue; rather it was the unregulated collective investment scheme (‘UCIS’) which was wholly unsuitable and mis-sold by a regulated financial adviser.
Clarke Willmott’s specialist financial services litigation team, formed 25 years ago, is currently seeking compensation for numerous investors, with the team having already recovered over £50m for its clients in recent years.
What to do if you have lost money
Our specialist financial services lawyers at Clarke Willmott have a wealth of knowledge and experience advising clients who have suffered losses as a result of investing money, whether in bonds, tax mitigation vehicles or pensions.
There can be multiple parties involved in any claim or complaint, and strict time limits within which to make them, so it is important to take legal advice without delay.
We would be pleased to offer a free, no-obligation initial consultation to discuss your particular situation and the options available to you.
To speak with a member of our financial services litigation team, please request a consultation.
Note: Nothing in this article is, or should be treated as, financial advice.
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