Why Avoiding Structured Investments is a Mistake

Video: Emma Davidson explains why avoiding structured investments is a mistake

Clients who ignore the benefits of structured investments could be making a mistake. In this video, Affinity Capital Director Emma Davidson explains why.

Structured investments can provide a number of benefits to clients’ portfolios, yet some organisations feel they are too difficult to understand. This attitude can lead to them ignoring structured investments altogether.

While this approach may seem reasonable at first, investors are often missing out on significant opportunities to add value and reduce risk across their portfolio. Put simply, avoiding structured investments is not a recommended long-term strategy.

One of the primary issues clients face is that they do not have the necessary skills and expertise to effectively manage structures in-house. Fortunately, there are independent firms that can offer a range of services to meet the demands of high-net-worth professional investors, family offices and discretionary fund managers.

The Financial Services Authority Register, which is a searchable database of authorised and regulated advisers, may be a good place to start for organisations exploring their options.

As Affinity Capital Director Emma Davidson explains in the above video, investors may have been able to ignore structured investments in the past, but this is unlikely to be successful in the future.

“Our experience and findings over the last few decades has proven to us that structures are an essential part of any portfolio,” she says. “But our experience aside, there is independent research available to back this opinion up.”

How Affinity can help

According to Emma, there is a range of options available to clients who do not have the experience or time to manage structured investments themselves.

Finding a partner firm that can provide independent pricing analysis for structures is an important first step. This can help investors obtain the best deals, especially if they also have access to numerous investment banks for diversification.

Affinity Capital can offer these services and much more, including ongoing monitoring systems, interpretation of these monitoring activities and honest, transparent feedback.

We also help with administration tasks that arise during the structured investment process, which streamlines efficiencies, reduces errors and maintains strong relationships between investment banks and investors.

Emma believes there are various factors investors should consider when looking for a firm that can provide assistance on structures.

“Experience on both the investment banking and client side of the business helps. I refer to independence a lot because the resource being outside of the bank is of utmost importance,” she states.

For more information on why avoiding structured investments is a bad idea, please read our blog. You can also contact us directly by clicking here.