Maximising Value Through Excellence

Why investors need independent advice on structures

There are many benefits to structured investments, including capital protection, portfolio diversification and access to new markets. However, the importance of seeking independent advice when investing in structures can’t be overstated.

Recent research by the Financial Conduct Authority (FCA) identified the structured product market as an important part of the financial services industry – one that brings value to sophisticated investors, corporates and banks.

Nevertheless, the FCA’s Thematic Review of Product Development and Governance highlighted a number of areas where investment banks may be falling short in their services to clients who choose structures. These issues included:

  • Inadequate stress-testing of products across a range of market conditions
  • Lack of information to reduce the complexity of structures throughout distribution channels
  • Inconsistent due diligence when testing the value for money of structured investments
  • Market pricing shortcomings

Commenting on the findings, the UK Structured Products Association (UKSPA) said the report underlines areas of improvement that must be addressed to make structures more attractive.

“We agree with the FCA that it is important for all firms to identify target markets and bridge any gap in client understanding,” said Zak de Mariveles, chairman of UKSPA.

“We also agree that firms should aim to deliver economic value to customers, provide clear and balanced information and also provide distributors with enough information to advise on these products appropriately.”

Rather than wait for investment banks to up their game, forward-thinking investors keen to take advantage of structures should instead seek the services of independent experts. Finding the right partner means professional investors can benefit from people who have decades of experience within the structured investment environment.

For example, Affinity Capital has a range of offerings to bring more sophistication to investment in structures. These include best execution advisory services, order administration support and a truly independent securitisation platform.

To learn more about how Affinity Capital can add value to your investment portfolio, please contact us today.

Contact Us