Speaking at Money Marketing’s round table on structured products, Wilson said providers will always face difficulties if advisers struggle to categorise the risk of structured products, meaning it is almost impossible for the man in the street.
Wilson said: “At least unprotected vehicles like cautious managed funds have guidelines that give you a fair idea what is going on inside, meaning you can asset allocate for a client.
“The argument for with-profits was that a client could be exposed to it because of bonuses that would be paid to them. That did not turn out nicely and the last thing any adviser wants with the prevalence of treating customers fairly is a repeat of that scenario.”
Nucleus chief executive David Ferguson said: “The TCF issue is crucial. Usually it is a simple scenario for advisers where a product offers 100 per cent return as well as 40 per cent of the FTSE back over a five-year period.
“The problem comes when providers look to offer 140 to 180 per cent above market returns, which breeds discontinuity in risk profiles.”