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Mar 06

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Liberty Life

Maybe you are thinking of investing with Liberty Life…. Maybe you should reconsider..

The following is a true case study.

george orwell.eric blair

A few facts.

Liberty Life owns Stanlib Global and Standard Bank Money Market purchased in 2007; and valued at over R317billion.

Stanlib is registered with the South African Securitisation Forum.

Securitisation is the practice of bundling up “investments” and selling them on the stock market, this effectively removes any rights that were to be enjoyed and therefore there is no locus standi.

Liberty Life is a registered financial services provider or “originator”, agent; acting for and on behalf of Stanlib a Special Purpose Vehicle; SPV. This is not an investment for the contributor; but rather a wealth gathering vacuum where paper bundles are sold on and profited from by the SPV et al and very often resold many times; as well as being traded on the stock exchange.

Our Case

Our case documents the experiences of an “investor” who; being advised by her Liberty Life Financial Advisor, in 1988 took a retirement annuity for R60 000 instead of buying a property for cash, as this would pay a monthly pension that would cover the bond repayment and provide sufficient funds for groceries, the monthly payment promised was R700pm. This would; at that time have purchased a modest 3 bedroomed property.

The R700 never materialised, the first payments commenced at R600 and decreased dramatically until 2002. At this time cash was needed; so the advisor recommended that 1/3 of the investment be released and the balance be re-invested. Stanlib Global and Standard Bank Money Market were given R40 482.05 to produce a nice return.

Twelve years later the monthly payments have reduced to R59pm, compared to a modest property; which by now would we drawing a rental of possibly R7000pm.

When the original contract was requested, back at the end of November 2013; along with other documents such as an invoice for services rendered, and original financial accounting, a barrage of documents hit the inbox of the investor, providing a thick smoke screen of prevarication and cover-up.

After many more weeks of research and complaints to the various departments, the following has come to light.

Purchase price R40 482.05

less contribution charge R 1 012.05

less upfront asset swap management fee R 303.62

amount allocated to investment R39 166.38

total paid since inception monthly R33 977.73

current investment value R 3 270.76

less 40% expenses outstanding R 1 308.30

Balance R 3 880.35

Proposed settlement R 1 962.46

Allowing for some sloppy addition and this comes to exactly what was contributed in 2002.

The obvious conclusion is that there was no investment on behalf of the investor, that funds were merely returned, less costs; alternatively a loan was made to Liberty Life and interest has been paid over the intervening period.

In a recent letter to the investor, the Actuary stated that there was no contract in the traditional sense of the word and that if there was it would be impractical to furnish one to a client upon request.

This brings us to points regarding contract law.

All valid contracts need to have the following: offer, acceptance, intention, sufficient and equal consideration, mental and lawful capacity to contract, legality of purpose, gave genuine consent (knowingly, willingly and voluntarily), certainty of terms and conditions.

All parties have a right to sight.

Privity of Contract and the Doctrine of Privity.

  1. The doctrine of privity. A valid contract, if one exists, is a private contract between the parties who make it and no other person can acquire rights or incur liabilities under it.
  2. Scope of doctrine. The doctrine of privity has two aspects.

    a) no one can acquire rights under a contract to which he is not a party.

    b)no one can incur liabilities under a contract to which he is not a party.

By their own admission Liberty Life are not a party to any contract, and if they were they would not have to give sight.

A corporation has limited liability and is not blessed with the right to contract, as there is no meeting of the minds.

The conclusion is that there was never a contract. There was never any investment; as it is continuously referred to as a contribution and does not reflect any rise in value; only degradation over the 12 years.

Liberty Life have benefited from the contribution to the enormous detriment of the contributor. The value of the contribution has remained static in so far as the proposed settlement is exactly the value of the original contribution. All these figures above do not reflect the gradual healthy climb shown on the website; entirely the reverse.

The Investor has requested the return of her original contribution due to the failure of liberty Life to produce a valid contract; the R40 482.05.

Liberty Life have not addressed the concerns of the investor as laid down by her over the last three months, except to say that there is no contract, and that if there were they would not provide it. Yet they say that they have performed in terms of it.

Liberty Life have deducted costs…. tax, commissions, super commissions, management, marketing and distribution, administration, renewal expenses, acquisition costs, insurance; this after purporting to be an Insurer.

At best it is a really bad investment, as many people can personally attest. At worst it is a nasty scheme, designed to gather funds into a large account used to create wealth for a massive corporation.

Liberty Life have suggested that the contributor apply to the ombudsman for further assistance.

It is an observation that the ombudsman would be out of work if there were honest financial services providers.

Some dictionary definitions.

Contribution in the context of insurance is a method of distributing liability.

Investment is the investing of money or capital in order to gain profitable returns.

Securitisation is a process that enables the investor to lend money to borrowers without using banks as intermediaries.

This latter applies to our investor in so far as she loaned money to borrowers, but to no benefit to herself. According to the Stanlib site to enormous benefit to Stanlib and Liberty Life.

The advise here is to obtain a contract, prior to trusting anyone, and then holding them to the terms expressed. It is also recommended that one never enters into any contract with any corporation as corporations have limited liability. There can be no contract without a meeting of the minds; which these corporate entities do not have.

The mattress is a much better place to stash your cash as there are no inflated costs to contend with.

There is always a better option to buy gold as it is expected to rise to $3 000po.

It is up to you to decide.

I welcome constructive comments

Bobby

For more information about the criminal banking cartel; see the following cartoon. With thanks to realecontv.

http://www.youtube.com/watch?v=hE5Sw8qJ-g0

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