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

AJ Bell posts record rise in platform flows as AUA hits £108.7bn

AJ Bell posts record rise in platform flows as AUA hits £108.7bn

Net flows up 42%

Cristian Angeloni
clock 23 April 2026 • 2 min read
Why advisers should adopt Gaudi's 'my client is not in a hurry' approach

Why advisers should adopt Gaudi's 'my client is not in a hurry' approach

Dan Brocklebank makes keynote speech at PA360

Isabel Baxter
clock 23 April 2026 • 2 min read
Four Asian investment lessons in the face of turmoil

Four Asian investment lessons in the face of turmoil

South Korea, Vietnam and Indonesia have suffered some of the biggest falls since the start of the war

Gabriel Sacks
clock 23 April 2026 • 4 min read