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Structured products recommended by 4 in 5 IFAs

Skandia says 80 per cent of advisers are recommending structured products to their clients, saying capital protection is one of the building blocks of a sensibly diversified portfolio.

The recent survey of nearly 500 advisers also asked which features are most likely to influence them to recommend structured products to their clients.

The most popular features were choice of investment options and capital protection, with 69 per cent of financial advisers saying that they were likely or very likely to influence their recommendation.

This was followed by active management – 60 per cent and the benefits of reinvested dividends – 53 per cent.

Skandia has been conducting IFA research as it launches a new tranche of its protected portfolio investment.

In the new issue, the assured return option offers an increased minimum return of 18 per cent or 50 per cent of the final growth of the portfolio -whichever is higher.

The protected portfolio offers investors the opportunity to link to a portfolio of five leading actively-managed funds rather than passively tracking the FTSE 100 or another index.

Crucially the product also benefits from reinvested dividends, with the potential to further boost returns compared to products excluding this feature.

The new tranche will be available for investment from January 3, 2007 and will close on February 16, 2007 with a six-year term.

Skandia MultiFunds and Selestia head of marketing (investments) Graham Bentley says: “Today’s advisers have a much deeper understanding of risk and the effects that asset allocation, portfolio balancing and diversity in a portfolio can have on investment returns.

“Our research shows that financial advisers are looking for structured products that provide far more to clients than the older-style, passive index-tracking products. Using the MultiManager concept as the foundation, the new generation of structured products are built on strong investment options and can form a robust core to a well thought-out portfolio.”

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