A study suggesting investors are being misled on the returns they can expect from structured deposits has sparked a new dispute over the products' merits.
A report by consumer group Which?, published earlier this month, suggested few products achieve the maximum projected returns, while most return the minimum.
The group's principal policy adviser concluded structured deposits "deliberately blur the lines between saving and investing", often giving customers the impression they are "likely to do better than they actually are".
But the UK Structured Product Association (UKSPA) has condemned the report as "flawed" and suggested it unjustly harms the public's perception of the products.
In an open letter to Which?, UKSPA chairman Jamie Smith said Which?'s simulations were inaccurate and accused it of using "severely-imbalanced information".
According to the Which? report, which looked at a range of recently-marketed FTSE 100-linked savings products to see how they would have performed over the past five and ten years, most structured deposits came up "woefully short" of their maximum possible returns.
Citing one Santander account as an example, Which? said its research showed the product would not have paid out the maximum advertised return on a single occasion in the past decade, while it would have paid out the minimum return in 94% of cases.
But the UKSPA said its own simulations challenged the Which? report's findings. It also described as "mysterious" the comparison by Which? of the average annual returns on a range of structures with a Halifax five-year bond which, in 2007, was offering 6.2% AER.
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