In the long run, it is sensible to inform clients as fully as possible about the risks to capital presented by a product, so they understand what they are taking on and will not demand future compensation
Whether products are bought on an execution-only basis or with the benefit of advice, investors seem to pay scant attention to product detail and believe the products offer the undeliverable solution they are seeking. Part of me feels investors only have themselves to blame if they do not pay attention but I would be reluctant to claim product providers go out of their way to provide clear and understandable marketing literature. Sadly, there seems to be a reluctance to break through the opacity that surrounds most investment products and much of the responsibility is passed on to th...
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