Specialist defends structured products

Specialist defends structured products

The majority of IFA-distributed structured products maturing in the first quarter of 2015 returned a gain, a specialist has claimed.

Ian Lowes, managing director of Tyne and Wear-based Lowes Financial Management, and founder of StructuredProductReview, said 117 structured products matured in the IFA-distributed space during the quarter, with only one failing to return a gain.

According to the analysis, 103 of the products were linked to the FTSE 100. Of these, 53 were capital-at-risk investments producing an average of 8.01 per cent a year.

The report showed that the maturing structured deposits in the IFA sector, of which there were 36 in the quarter, produced healthy returns for deposit based investments.

The average return was 5.49 per cent interest a year for each of the 4.5 years they were in force.

Mr Lowes added: “Even the bottom quartile of deposit based maturities produced a very healthy 4.7 per cent a year without risking capital.

“Given the 0.5 per cent Bank of England Base Rate and the fact that these returns were delivered without exposing the original capital to the risk of loss (subject to FSCS protection in the event of the bank default) these are particularly pleasing.”

He added that although many typically poor value structured deposits - which had been “long criticised by Lowes Financial Management” had led to further regulatory scrutiny and headlines, these figures should help prove that IFAs who took the time to research their market have done well for their clients.