An essential website for investment IFAs is structured retailproducts.com. It gives full details of every new product and up-to-date reviews and comments.
Over £5.3bn of structured retail products were sold last year and, while this was down by 15 per cent on the previous year, this was entirely accounted for by the decline in sales of high-income products.
Capital-protected products accounted for £4.6bn worth of sales while high-income products sold just £770m in 2003. Falls in interest rates and implied volatility made the pricing environment for such products unattractive, while there was continuing fallout from maturing high-income bonds.
A total of 500 structured products were launched in 2003, up from 307 in 2002, with all this increase being from issues of growth products. The number of companies now offering structured products increased from 68 providers in 2002 to 86 in 2003, including nearly every major provider of retail investment products.
While most products offer 3 per cent commission, Norwich Union and Morgan Stanley as well as some others are offering between 3.25 and 4 per cent. Nvesta is the first provider to offer a trail commission option which is paid by the company and not by investors.
The majority of products are a much safer investment than investing in the market as a whole and many are much more attractive than tracker funds.
For product providers and major IFAs, structured retailproducts.com also offers a comprehensive research document on the market, together with market share statistics. The structured product sector is likely to continue to become an important part of this retail investment market.