EEA Life Settlements Fund

Information for Investors re Suspension of EEA Life Settlements Fund

Guardian Wealth Management Client Service Information.

News Update 19/01/12

To keep you updated with the current news on the EEA Life Settlements Fund….. read the open letter from the Chairman Simon Shaw to the FSA. This issue evolved in the UK and so the letter is very UK specific in relation to regulations and the conduct of the FSA. For those of you living away from the UK it stills gives a good insight into the issue. Some people in the financial press have stated the EEA fund has bitten back!

News Update 18/01/12

In order to keep you updated on the Fund please click on the link below if you would like to read a copy of EEA Fund Management Limited’s feedback to the FSA Guidance Consultation relating to Traded Life Policy Investments issued on 28 November 2011 :

http://www.eeafmg.gg/life_settlements_fund.asp

What is the EEA Life Settlement Fund?
The EEA Life Settlement Fund seeks to make returns for its investors by purchasing Life Policies in the US and making a profit on the difference when the policies pay out. It is a fund which helps diversify a portfolio as it has no correlation with traditional types of investments such as bonds or equities.

The fund has been a steady consistent performer and in this very difficult 12 months for other asset classes it has shown a return of 8%. The fund does not trade the policies, it holds them until the insurance companies pay the life cover.

In plain English what has happened? No jargon please.
The fund started to experience a high level of withdrawals. The Board of Directors for EEA Life Settlements Fund decided that if this continued it would be to the detriment of the people still invested in the fund. They needed to ensure a level of liquidity (money) to ensure the fund could function. The Board for the EEA life Settlement Fund took the decision to suspend the fund.

When did this happen?
The Board of Directors for EEA Life Settlements Fund made the suspension on 30th November 2011.

Why was there a large amount of withdrawals from the fund?
This all stems from general comments made by the FSA (Financial Services Authority) the financial regulator in the UK. In a consultation document looking at these types of funds they used emotive and critical language. Many professionals in the UK have branded the FSA irresponsible to start tarnishing a whole section of investments with this type of language. It is undisputed that the FSA, who should be responsible for ensuring financial stability for retail investors, has caused a run on the fund.

At no point has the FSA criticised the EEA Life Settlement Fund. Any comments made were not aimed specifically at this fund.

It is fair to say the FSA has faced a large amount of criticism from many quarters over this issue.

Okay, I can see how this has come about, what happens now?
The fund will remain suspended until the Board of the EEA Life Settlement Fund makes further decisions. The fund currently holds $995 million (£608 million) in assets. It may in the future allow further withdrawals but in an orderly manner. Most people have invested in this fund with a medium to long term outlook and it is still part of your portfolio.

Can I withdraw my money from the fund?
No you cannot at present. The purpose of the suspension was to stop withdrawals at this time. This may change in the future but we do not have any time frames in which this may happen.

What can Guardian Wealth Management do?
In general it is fair to say that Guardian Wealth Management clients who have the EEA Life Settlements Fund in their portfolios have been content with the steady returns it has produced for them over the previous years.

Guardian Wealth Management are an independent financial advisory company which means we are not owned or have influence over funds, investment companies, banks or insurance companies. This allows us to give whole of market advice to our clients. This ensures we are not tied to giving narrow financial planning advice based upon products or investment with which we have a vested interest.

Guardian Wealth Management therefore has no direct control or influence over the EEA Life Settlement Funds decisions, that is a matter for their Board. However we are in communication with representatives of the Fund so that we can give updates on any developments or decisions by the board that affect our clients.

At the moment we are a conduit for accurate information in relation to the fund. You can continue to visit our website for this accurate information. When we get updates they will be posted here. We may from time to time send updates direct to you if there is a significant change but in the main you will find all the information you need here.