This week the total number of UK structured products that have been analysed on the FVC Structured Edge research service has reached 6000. Structured Edge has been active since 1999 and since then has been providing quantitative research reports for financial advisers and others wishing to analyse individual UK structured products. The service is whole of market and has become the number one resource for IFAs to research and compare structured products.
This service has been developed and improved over its years in operation to provide advisers with comprehensive and easy to digest analysis. Its underlying quantitative engine is fully aligned with FVC’s institutional services of stress testing, PRIIPs calculations and independent valuations.
We are committed to further significant improvements to our service and will be rolling out a comprehensive set of adviser tools including an automated panelling process and detailed lifecycle information about products that they have previously advised on. This will be launched by September 2021.
The UK structured product market continues to evolve and despite the challenges of 2020, product providers and issuers have brought a consistent and varied range of products to market. Demand and interest from financial advisers has increased as the merits of capital protection and autocall features have become more desirable given recent events and the current climate.
Healthy and diverse UK market
Five plan managers and appointed representatives (distributors) are currently very active in the market, each distributing around 50 products a year or more. These are MB Structured Investments, Meteor and Walker Crips who generally favour FTSE-100 linked products and Mariana and Tempo who prefer to use alternative indices, such as equally weighted, fixed dividend or ESG linked choices. Other regular plan managers include IDAD, Causeway and Hilbert who all combine a UK presence with expertise in other markets such as France and Dubai.
Although products are designed, created and managed by the plan managers, the assets that the investor holds are backed by a major investment bank. In the last year there have been eight well known institutions who have issued a consistent pipeline of products to support the market. These are Barclays, BNP Paribas, Citi, Credit Agricole, Goldman Sachs, HSBC, Morgan Stanley and Societe Generale. All of these banks are very experienced and active in pricing and trading derivatives and structured products. This combination of communities of distributors and investment banks means that the UK market is in a sound position to continue to issue product and react to investor demand for both capital at risk and deposit investments.
Support for the industry
Finally, the sector continues to be well supported by the UK Structured Products Association (UKSPA) which represents its members many of whom are drawn from the firms mentioned above. UKSPA has a regular dialogue with UK regulators and international trade bodies such as EUSIPA (the European Structured Products Association). UKSPA has also directly supported the market through the Portfolio Optimiser Application, built and powered by FVC which enables advisers to analyse the effect of putting a structured product in a portfolio of funds to provide further insight around the use of structured products in the retail market.
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