Structured Products – Individuals & Corporates

30/06/2023

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Structured products are designed to provide a return in excess of what is available from traditional bank accounts, whilst also offering a degree of protection on the underlying capital.

Whilst not an exhaustive list, these products can often be used in the following scenarios.

For Individuals:

Where surplus cash is currently held on deposit earning little or no interest.
To introduce additional diversification to an existing investment portfolio that an individual may already have.
To provide the potential of a return in falling/volatile market conditions by providing an element of downside protection.
Where there’s a potential future expenditure commitment, but no requirement for the funds in the short-medium term.
Where an individual would like the potential for additional ‘income’ that can be used to support them during retirement or to help provide funds for discretionary expenditure such as gifting to family.
The arrangements link the potential return to an underlying asset, such as an equity index (i.e. FTSE 100 index), commodity or currency. The products that we use would typically to be linked to the FTSE 100 or S&P 500 (although alternative assets are also possible).

For Corporates:

When companies are holding excess cash on deposit earning little or no interest, and that is not required as working capital.
When companies have a potential future liability/ expenditure commitment but wish to generate a potential return in the short-medium term. For larger investments, we are able to negotiate ‘bespoke’ terms with some of the leading providers in this area and to suit the required timescale.
To introduce an element of diversification to an existing investment portfolio that a company may already have.
To provide the potential of a return in falling/volatile market conditions by providing an element of downside protection.
The arrangements link the potential return to an underlying asset, such as an equity index (i.e. FTSE 100 index), commodity or currency. The products that we use would typically to be linked to the FTSE 100 or S&P 500 (although alternative assets are also possible).

Importantly, you do not actually invest in the associated index, it is simply used as a ‘trigger’ for a potential pay-out.

The arrangements are marketed by an intermediary, with a major institution (a bank) acting as the counterparty (essentially sitting behind the arrangement). We generally recommend products backed by major institutions such as Barclays, HSBC, Morgan Stanley and BNP Paribas.

These banks typically have credit ratings of at least ‘A’ with Standard & Poor’s (one of the world’s leading credit rating agencies). We only recommend products that we feel have a sufficiently strong counterparty.

For specific guidance on Individual and Corporate Structured Products, download our information sheets and case studies below:

Structured Products for Individuals

Case Study – Structured Products for Individuals

Structured Products for Corporates

Case Study – Structured Products for Corporates