Lowes Financial Management managing director Ian Lowes has set up www.structuredproduct review.com to help dispel what he describes as mis-information and confusion in the sector.
“There are almost always at least a few structured products available that I think are very worthy of consideration as part of a diversified portfolio to help reduce risk and potentially enhance returns,” he says. His most recent personal investment was the L&G FTSE Growth Plan, while his most recent maturity was the Meteor Prima Plus Plan.
But structured products are never going to be the “holy grail” and these products do have their limitations – such as counterparty risk, Lowes adds.
“In addition, the fixed terms of structured products also are arguably problematic in some cases, but equally the fixed maturity dates can aid planning.
“And of course many structured products have capped returns, which could prove to be much lower than the market rise, but this is an acceptable price to pay for the protection built into the plans,” Lowes says.
Structured products should not be seen as a “quick fix” or be used by those who do not understand them or the market, he warns.
Lowes believes the appetite for capital protection is largely unchanged: everyone still wants as much return as possible for as little risk.
“But that said, comparing different structured products often clearly shows the risk/reward relationship, and certainly at the moment realistic investors will accept that it is worth taking a little more risk for the extra potential returns especially when the risk is clearly defined.”
