Disgruntled investors in the troubled AIG Life Enhanced fund will call on the firm to extend its deadline for withdrawal decisions, as the AIG Victims action group's first step towards collective legal action.

A number of investors in the AIG Life vehicle, which consists of the Premier Access and Premier Bonds, were seeking to cash in their units following upheaval in the money markets.

Investors were initially given until 25 November to decide whether they would exit the fund in December, or switch into a new vehicle which would fully mature in 2012.

The AIG Victims action group, which has over 200 members, held two meetings last month and has gained national media coverage.  The lobby group says that it is now in the position to appoint legal representation and has written to members asking for financial contributions to join the collective action against AIG Life, along with the private banks that sold the product.

According to the lobby group’s website, its first legal action will be to serve AIG Life with a formal request that the 25 November deadline be extended.  This letter is to be submitted in the next 72 hours.

Members of AIG Victims have been asked to make an initial minimum contribution of £250 towards legal fees in order to participate in the group action.  Those who have not contributed within this 72-hour period will have to contribute £1,000.

News of the extension request follows media reports that UK wealth manager St James’s Place is to offer a one-off goodwill payment to clients it recommended to invest in the stricken fund.

Individual payments, which will be made in April 2009, are to be calculated on the current value of each client's units in the £5.7 billion fund, which St James's Place says total £69 million.

The AIG Victims group is to convene another meeting of its members in London later this week.

AIG representatives declined to comment when contacted by WealthBriefing.