Is it time to level the playing field?

clock

One of the key strengths of structured products in the UK is that the terms are almost always shown net of all charges - what you see is what you get.

So, if a product pays 7.5 per cent p.a. income, someone investing £10,000 will get £750 each year and 100 per cent return of capital will deliver £10,000 back. “But I can get a yield of 8 per cent on the XYZ high income fund,” says the adviser, completely ignoring the effect of charges. “Indeed,” say I (trying not to break my personal cynicism reduction goals) “but there’s a 5 per cent bid/offer spread and a TER of 1.75 per cent p.a., so the £10,000 investor only has £9,500 invested, on which they’ll receive income of 6.75 per cent or about £595. So their 8 per cent yield has turned in...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Investment

Consultancy launches to provide IFAs with 'robust' investment processes

Consultancy launches to provide IFAs with 'robust' investment processes

Sheridan Admans launches Infundly

Isabel Baxter
clock 06 November 2025 • 1 min read
Inflation protection not front of mind for financial advisers

Inflation protection not front of mind for financial advisers

Titan Square Mile report suggests

Jen Frost
clock 04 November 2025 • 3 min read
Trick or treat? The UK and global economy face their Halloween ghosts

Trick or treat? The UK and global economy face their Halloween ghosts

‘Wealth managers and market professionals are tiptoeing past economic graveyards’

Stephen Jones
clock 31 October 2025 • 4 min read