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MM survey shows 79% of advisers more wary of structured products

Some 79 per cent of advisers are more wary about recommending structured products due to concern over Lehman-backed investments, according to a moneymarketing.co.uk straw poll.

According to a survey of 163 advisers, only 21 per cent are not wary of recommending structured products in the wake of heightened concern about products financed and underwritten by Lehman Brothers.

Chelsea Financial Services head of investment products Matthew Woodbridge says: “This is not surprising. The precipice bond problems that occurred a few years ago encouraged advisers to become more aware of the market risk of products and I think the product providers reinforced this by the way they redesigned their products.

“In the background there has always been counterparty risk but it has taken an event such as Lehmans to bring that into sharp focus. Until the situation is sorted out, I can understand why some advisers would continue to be wary.”

Churchill Investments director Chris Gilchrist says the firm does not recommend structured products and has never found one which offers convincing “slam-dunk” value to the investor.

He says: “Providers constantly go on about how they are simple products which give naive investors an easy way into the stockmarket and once again we have a demonstration that they are not. You don’t get what they say on the tin and it is not surprising that a lot of people who were taken in by providers have decided to back off.”

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