If you’ve been awarded a settlement from a personal injury the money you received is unique. It’s probably essential to your ability to provide for you and your family, and as a result, should not be treated the same way other investors would treat their cash reserves. A person who can expect to work for the rest of his or her life can afford to take a little risk with their own portfolio. But if you’ve been injured and your ability to earn an income has diminished then you aren’t like ordinary investors and your money should be invested accordingly. That’s why 7IM has recently created a fund designed especially for personal injury claimants. Financial Times Advisor explains:
The vehicle was developed in response to plummeting interest rates.
Whereas personal injury victims would have traditionally parked their pay-out in a cash deposit or a Court of Protection Special Account, both now offer just 0.5 per cent annual growth.
In the case of the Court of Protection account, this was cut from 6 per cent at the start of the year.
7IM said victims of personal injury were not “ordinary investors” and their complex financial needs were rarely catered for by standard investment products.
There was a danger IFAs may be tempted to put such clients into riskier equity-based portfolios in an attempt to beat cash returns, the firm said.
The 7IM Personal Injury fund will look to achieve its Libor-plus return with less volatility than the market.