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Advisers turning to structured products

Almost 90 per cent of advisers are increasingly looking at using structured products within their clients’ portfolios in the next year.

Research from Trustnet Adviser and HSBC Investments polled 600 advisers and shows that 65 per cent believe that between 5 per cent and 20 per cent of a client’s portfolio should be held in structured products. The advisers questioned typically favour these vehicles as an alternative to with-profits funds, deposit accounts, equities and bonds.

Seventy-six per cent say they have invested more than 250,000 of clients’ money into structured products in the past year. Simple product structures are generally preferred with 68 per cent favouring the FTSE 100 index as the underlying exposure and most shy away from overseas indices. Over half of advisers also favour structured products linked to investment funds, property and multiple indices.

Hedge fund linked structured products get a negative response from 60 per cent while products with returns linked to interest rates, commodities and foreign exchange are also unpopular.

Asked what they want from structured product providers, intermediaries put better terms for the client top, followed by simpler products, more detailed product information and education, more variety in product type and finally better terms for the adviser.

HSBC Investments UK structured products distribution director Chris Taylor says: “Investment sales remain challenging but the survey highlights structured products as a product area that is being viewed positively and utilised pragmatically by advisers.”

Financial Express head of marketing and communication Paul Wynne says: “The survey reinforces others which have been conducted rec- ently with sentiment for str- uctured products gaining solid ground.”

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