Structured Products

updated: July 26, 2010

Retail structured products have become a feature of the financial services landscape since 1996.  As interest rates have fallen below their historic levels, investors requiring income have been attracted by the exceptionally high income rates on offer.  Investors who took out the earlier offerings of such products were generally delighted with the returns that they achieved, either in income or capital growth.

However, since 2002 structured products have not had a good history.  These products have suffered from poor selling practices and investors purchasing through newspaper advertisements with no real understanding of what they were buying. 

The market has learned from these setbacks.  Product design has improved, the majority of products now offer good capital protection, and advisers have had to make sure that they really understood what they were recommending to their clients. 

In particular, whereas in their early days, 80% of retail structured products were sold through newspaper advertisements, direct offers through the post, or over the counter at a high street bank branch; independent financial advisers now account for around two-thirds of the market.

To obtain further information please click here for our pdf Guide to Structured Products.