Blackmore Bond Insurance Guarantee Failed? ION/NLS Worthless Policy?

Blackmore Bond investors seem to be hanging all their hopes of recovering money on the Insurance Guarantee which is understandable given the way it was promoted in the literature. However even alongside the discussion of the guarantee the documents clearly state "Capital at risk"

There are many get outs that the insurance company can use to avoid paying but based on the premium paid of £10k for £45 million of cover it is extremely unlikely that there is any chance of the company paying out any money.

From the Blackmore Bonds website prior to closing in 2019 - very clear that 20% was taken from every bond

Screenshot from the Blackmore Bonds website prior to closing in 2019

Excess Charges paid from your bonds

For every investment made into Blackmore Bond only a fraction of it went to the company to invest in property. The rest was taken in fees, charges and interest payments.

• 20% was given to Surge Financial for marketing and admin
• 3% was given to Insurance company for the guarantee
• 9.9% per year given back to the investor as interest
• 10% to Blackmore Group for services provided
• 

So over a 4 year period (the maximum anyone could have held Blackmore Bonds) the amount that would have been available to Blackmore to use for property is:

• 20% Surge plus 3% Insurance
• 10% to Blackmore Group
• 9.9% year 1 interest
• 9.9% Year 2 interest
• 9.9% Year 3 interest
• 9.9% Year 4 interest

So a total of 39.6% interest plus 33% charges meant 72.6% taken out so only 27.4% of your money would actually have been used for property development.

With such high charges there is no way any insurance company would offer a policy to pay out 100% of the bond when 23% was already gone at the start of the investment.

The Information Memorandum makes clear there are limits on when the payout could happen: