Skandia Investment Group is considering launching guaranteed products.
In his first interview since taking over from Jamie MacLeod as SIG chief executive in September, Nils Bolmstrand says the firm is looking very closely at the South African market to see whether guaranteed products could be imported to the UK.
He says: “The way Old Mutual works with guaranteed products in South Africa is of interest to us. We are looking at what we could bring to the UK market in terms of guarantees and alternative guaranteed products that differ to what exists in the UK market.”
He says the development of transparent guaranteed investment products help clients understand risks and rewards at the same time. He says: “I do not think anyone has found an upside and downside solution that is easy to understand for the client while giving them true protection. That is the big challenge.”
Baronworth Investment Services director Colin Jackson says any products with genuine guarantees will interest advisers. He says: “In this climate, truly guaranteed products are much needed, more than structured products that are merely protected. A lot of our clients ask for guaranteed products that ensure, come what may, they will get their money back.”
Dennehy Weller managing director Brian Dennehy says the UK has a lack of guaranteed products because the manufactur-ing cost is too high to generate a good profit. He says: “Everyone would want a true guaranteed product with the right returns – it is a no-brainer. The problem is any products that can offer a real guarantee and potential for returns are either too complex or the guarantee lacks quality. I am not sure why South Africa would be different as guarantee costs are the same the world over.”