Take up of structured products within the UK is disproportionately low compared with the US and Europe in part because of dogma within the adviser community, according to one investment analyst.
Chris Taylor, from financial consultancy The Investment Bridge, told advisers that the UK's structured products market - at £50bn compared with the world wide market of £1trn - is disproportionately low. He said there are several reasons for this including long-standing dogma held by certain advisers in the sector."
Speaking at a Personal Finance Society investment seminar today, Taylor said that the UK differed from many markets in that between 65% and 75% of investment advice is through independent wealth managers and advisers, as opposed to high street banks.
He explained that this had affected take up of the products with advisers less likely than the banks to recommend structured products.
In part this was related to views held by the advisory community, he said: ‘‘The views of some advisers [around structured products] are deeply entrenched, sometimes coloured by events of the past, and now out of date."
Taylor explained that at a time when investors are increasingly looking to protect their investments from volatility in the market, structured products, which can protect against downside risk and provide defined returns can be suitable, within a diversified portfolio.
"In short, a structured product can define what a client will receive at the outset.
"Many investors find a product that delivers what it says at the beginning of the term easier to understand than the various and unpredictable ups and downs of the market.
'Best of breed' structured investments provide advisers and investors with investment options that neither active or passive funds can or do offer," he added.
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