Structured product providers have hit back at Which? Money’s recent list that ranked structured products among its top 10 useless financial products for consumers.
The list features structured products alongside mobile phone insurance and payment protection insurance, branding them as “confusing, complex and costly products” people could be wasting thousands of pounds on each year.
The UK Structured Products Association says the report’s comparison of structured products with an Isa is confusing and argues they should be considered as part of a diversified portfolio.
A spokesman says: “In most cases, structured products achieve the returns investors expect and contribute to the performance of a diversified portfolio.”
Blue Sky Asset Management chief executive Chris Taylor believes the report’s broad-brush indictment of all structured products is unfair.
He says: “Unbridled and sweeping comment from publications that is potentially ill-informed is as much of a disservice to investors as bad providers and bad products. The key word is differentiation – not all providers or products are the same.”
Which? Money acknowledges not all structured products are the same but is concerned about the ways that they are marketed to consumers.
Which? Money editor James Daley says: “The true risks of structured products – such as counterparty risk, inflation risk or risk to capital – are too often downplayed or not mentioned at all. We will continue to advise all but the most sophisticated investors to give these products a wide berth.”