FCA threatens fines to remedy structured product failings

Other areas of concern are around prices for buying back policies to provide secondary liquidity from ‘captive’ clients and stress testing which fail to take into account market fluctuations or ‘real world’ pricing.

The paper is published alongside consumer research paper which found retail investors have limited ability to assess complex structured deposits and that they often overestimate the returns they will receive from products.

The regulator states as a result of the research that providers need to make sure advisers distributing products receive the information needed to address the effects of investor biases.