Structured Products

Spirit_2

Anyone got any experience of Structured Products?

My IFA has included them in a plan for 10% of my investment but a trusted friend has advised not to touch them.


What was youe experience of them?

Superscrooge

There are so many different structured products that I think it would be difficult for anyone to advise without knowing a little more about exactly which product and why the IFA had recommended them as suitable for you.

Below link provides some info that might be useful

https://www.moneyadviceservice.org.uk/en/articles/structured-deposits-and-investment-products

Sometimes they are used to help protect you against downside risk. I was looking at one a few months back that promised to match the return on the FTSE and also guaranteed that if the FTSE went down over 5 years you would get your money back. It seemed at first glance better than a tracker. All the upside and none of the downside risk, until I realised that you were giving up the dividend payments for the guarantee of not losing money.

I guess it would suit some risk averse investors but as its not that common for stock markets to be down over five years I would rather grab the dividends and take the small risk of losing money.

There are a couple of IFA's that regularly post on this forum that could probably give you better guidance that I can.

dunstonh

Anyone got any experience of Structured Products?

yes.

My IFA has included them in a plan for 10% of my investment but a trusted friend has advised not to touch them.

My position is that I rarely use them but occasionally, good ones do come around. The market counterparty has to meet a required level and we follow the FCA guidance which was no more than 10% with any one market counterparty and no more than 25% in total investible assets in SCARPS.

The terms have to be worthwhile. Terms are not consistent and you can get years without any decent SCARP being available. Then some will come along that meet the criteria that can be worth it.

Banks oversold these but you shouldnt mix up the versions the banks have with those that are available via IFAs.

Why has your friend said not to touch them?

Spirit_2

dunstonh wrote: »

yes.



My position is that I rarely use them but occasionally, good ones do come around. The market counterparty has to meet a required level and we follow the FCA guidance which was no more than 10% with any one market counterparty and no more than 25% in total investible assets in SCARPS.

The terms have to be worthwhile. Terms are not consistent and you can get years without any decent SCARP being available. Then some will come along that meet the criteria that can be worth it.

Banks oversold these but you shouldnt mix up the versions the banks have with those that are available via IFAs.

Why has your friend said not to touch them?

I asked for an explainaton of what a structured product is.My IFA had explained but I am recovering from a stroke and I could not understand how it worked. It seemed too good to be true. I trained as an accountant many years ago but could not fathom this. I read these boards quite a bit as currently housebound and there posters who I have met in RL , who offered an opinion which I respect.
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