Advisers steer clear of structured products

Apr 11, 2008 @ 9:45 am

By Jeff Benjamin

Structured products are clearly not for everyone, even advisers — a point that was underscored at the Structured Products Association’s annual convention in New York.

A survey by the association found that 40% of the more than 200 industry representatives in attendance do not invest in the derivatives-based products.

“That was very surprising to me, especially in an audience of structured-products professionals where I bet 100% of them have investments in mutual funds and equities,” said Keith Styrcula, chairman of the New York-based association.

“We know that there is only about 5% or 10% penetration among financial advisers, but we need to eat more of our own cooking.”

Mr. Styrcula, who included the survey question as part of a larger survey that asked attendees about a range of industry trends, suggested that “owning a structured product should be a distinguishing factor.”

“You should not be selling structured products if you’ve never bought one,” he said.

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