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Sponsored debate: Investec on structured products post-RDR

Sponsored debate: Investec on structured products post-RDR

Gary Dale, head of intermediary sales at Investec Structured Products, recently took to Twitter to field the questions of New Model Adviser® readers. Here's what they asked, and the answers they got.  

Petronella West @PetronellaW

Who is going to sell structured products if banks are not providing advice?

GD IFAs already distribute structured products; banks' market share dropping, IFAs' market share increasing.

Martin Bamford @martinbamford 

Unreasonable to think IFAs would ever flog same volume of structured products as banks though?

GD Very different and needs further due diligence to assess value with individual products.

 

Gary Dale 'Important to have RDR strategy that covers all intermediated distributed streams'

Dhan Sharma @insidethemaze

Will you be launching any more structured products that guarantee capital like the one in 2009?

GD We no longer use word 'guaranteed' and structured deposits with income are very difficult to price.

 

Martin Bamford @martinbamford (pictured above)

How can IFAs best quantify the counterparty risk which replaces capital risk in structured products?

GD Counterparty risk doesn't replace market risk; all SIPs contain both market & counterparty risk.

Stephen Dentons @stephendentons

Do you feel that the FSCS levy taints IFAs views of structures and restricts the market?

GD Yes it does, but remember that FSCS is protection of last resort- FSCS should not form part of advice process.

Scott Taylor @scottbrilliance

How do you suggest advisers conduct due diligence? Should they have to rely on the provider to tell them all is well?

GD No. Banks can help and should make all the relevant information accessible. But an adviser is still responsible for comparison.

 

Petronella West @PetronellaW (pictured above)

Do you think the market will contract, and are they good value when there's so much volatility?

GD IFA market has increased year on year since 2007; so expectation is for more growth. Volatility at historic low.

Scott Taylor @scottbrilliance

Does the low interest rate environment make it hard for structured products to give value?

GD Low rates makes it very difficult to structure deposits. Care needed when assessing multi-asset products.

Petronella West @PetronellaW

If no commission is being taken, will we see higher participation rates coming through? 

GD All products are price-sensitive but all things being equal, coupons and participation rates will increase.

 

Scott Taylor @scottbrilliance (pictured above)

Should clients be looking at listed products for easy exit or fixed term?

GD Clients should be matching product to meet needs from a full range of retail investment products, closed or open ended.

 

Dhan Sharma @insidethemaze (pictured above)

How is adviser charging being factored in into pricing of your structured products?

GD Adviser charging doesn't factor into pricing post-RDR; fees are taken from gross product return. The Investec strategy for RDR is already agreed- structured deposits with commission and customer agreed remuneration, structured investment products with customer agreed remuneration and either/or versions of structured investment products with commission.

Petronella West @PetronellaW

Do you think better research will become available post-RDR?

GD I sincerely hope so. Investec Structured Products already provides comprehensive research, and hopefully others will follow.

Many thanks to everyone who contributed. If you would like to get involved in our next Twitter #debate, follow @CW_Online

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