Morgan Stanley revises structured products for RDR

Marc Chamberlain, executive director, said a suite of four products were a continuation of a previous offering of FTSE-linked products which now facilitated adviser charging.

• Accelerator Bonus Plan 4 – kicks out on the third, fourth and fifth anniversaries if the FTSE 100 index is 5 per cent above its starting level, giving investors 45 per cent growth on their initial investment. If the plan does not kick out it runs to maturity and will provide 10 times any growth on the index capped at 4.5 per cent.

• Defensive Bonus Plan 8 – kicks out from year two onwards with a cumulative 9 per cent coupon if the FTSE 100 index is at, or above, 90 per cent of its starting level. The plan is also available on a non-advised basis offering a 7.5 per cent coupon.

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• Defensive Digital Growth Plan 9 – at maturity the plan pays out 60 per cent (10 per cent a year) if the index is at, or above, 90 per cent of its starting level. Capital protection is European at 50 per cent.

• Protected Growth Plan 52 – kick out at year three if the FTSE is up 5 per cent, returning the investors’s original investment plus 17 per cent. If the index is not up 5 per cent the plan runs to maturity and acts as a tracker. The plan has 100 per cent capital protection.

Peter Davies, founder of Cardiff-based Create Wealth, said: “It appears that the counterparty is Morgan Stanley. I would prefer a stronger counterparty or a multi-party approach. While the five-year credit default swap rates are also towards the higher end of the risk scale, the potential rates of return on offer do look attractive.”