Why structured products deserve a fresh look

Following on from our previous must read on the benefits of getting back on the road and visiting advisers again, one clear theme kept coming through in the conversations we had: “We haven’t looked at structured products for 15+ years.”

That feedback was important.  It highlighted something that needed addressing directly.  In many cases, the hesitation was not based on recent experience, but on memories, assumptions and concerns that had built up over time.  So, it felt right to tackle some of the obvious misunderstandings head on.

Structured products still carry an unfair reputation in parts of the UK adviser market.  For some, the sector remains too closely associated with older headlines and historic events.  Those events mattered, and nobody should pretend otherwise.  But they also created a legacy bias that has persisted long after the market itself changed.

That matters, because the conversation about structured products should be based on how they work now, not on how they may have been viewed years ago.  The reality is that many advisers have simply not revisited the sector in any meaningful way.  As a result, a potentially useful part of the planning toolkit is sometimes dismissed before it is properly assessed.

At IDAD, we believe that is a missed opportunity.

Structured products and deposits have an important role to play when used appropriately.  They are not designed to replace every other solution, but they can offer a clear, disciplined way to target defined outcomes, manage risk and support client objectives in a more focused manner.  In the right circumstances, that can be highly valuable.

Part of the challenge is familiarity.  Cash, funds and MPS are well understood and easy to compare.  Structured products require a different kind of discussion, because the starting point is not simply asset class or benchmark.  It is the outcome the client wants, the risks they are willing to accept and the trade-offs involved.  Once that conversation is had properly, the case for structured solutions becomes much clearer.

This is where the modern market has changed for the better.  Product design is more transparent, governance is stronger and the suitability conversation is more robust than it once was.  Advisers are now expected to consider fair value, target market and client outcomes in a much more structured way.  In that environment, blanket exclusions become harder to justify.

It is also worth recognising that the sector is often judged more harshly than other investment approaches.  A client may face significant downside in a conventional equity or fund holding, yet a well-constructed structured product can be dismissed simply because it feels less familiar.  That is not balanced advice.  Advisers should assess each solution on its merits, rather than rely on outdated assumptions.

The key point is that structured products are not about adding complexity for its own sake.  Good structures are designed to answer a specific client need in a clear and efficient way.  That may be capital protection, defined growth, income generation or a tailored risk-and-reward profile that would be difficult to replicate elsewhere.  The value lies in the precision.

For IDAD, that is the opportunity we want advisers to see.

We focus on building solutions that are thoughtful, transparent and relevant to real-world advice.  We believe in clear design, strong governance and straightforward communication.  We also believe advisers should feel confident using structured products and deposits where they are suitable, rather than avoiding them because of outdated perceptions.

The market has moved on.  Client needs have become more nuanced, expectations are higher and advice standards are more demanding.  That is exactly why a modern, well-explained structured solution can still be highly relevant.

The strongest adviser conversations are often the simplest ones – what problem are we solving, what alternatives exist and what is the trade-off?  When those questions are answered honestly, structured products stop looking like a legacy issue and start looking like a practical planning option.

Structured products do not need hype.  They need a fair hearing and for advisers prepared to look again, they may prove to be one of the most underused tools available today.

For firms wishing to learn more or revisit the benefits of structured products and deposits, IDAD can also provide accredited CPD training.