Financial planners have reacted angrily to Association of International Life Offices’ claims that they were ‘blind’ to the risk of offshore bonds linked to Icelandic bank accounts.

Ailo chairman Allan Morgan-Moodie last week told New Model Adviser® that it was ‘quite disingenuous’ of advisers to say they were unaware of the lack of policyholder protection in offshore centres in the Channel Islands and Isle of Man.
Minesh Patel of London-based EA Financial Solutions said life companies were trying to distance themselves from the scandal caused by the collapse of Iceland’s Landsbanki and Kaupthing banks. Offshore bonds were just the latest problem – like endowments and with-profits – for which life companies put the blame on advisers, he said.

‘We haven’t the resources to do due diligence on banks,’ said Patel, who has two clients with almost £400,000 in Kaupthing Singer & Friedlander Isle of Man through offshore bonds.

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