Registered Rep. issued a news release today reporting on the state of the structured products market. The sale of structured products has grown by an estimate of 33% from 2005 to 2006. Yet the general features of structured products seem to make these products unattractive: complex, expensive, and illiquid. Financial advisors might favor structured products for it enables portfolio diversification and for its ability to tailor to the specific needs of investors. SLCG warns investors of the hidden costs and risks of structured products and encourages investors to carefully understand such products - such as their payoff structures, associated fees, liquidity and credit risks - before committing to purchasing them.
This press release also features a paper written by Craig McCann, founder of SLCG, called 'Are Structured Products Suitable for Retail Investors?' Investors are invited to join in on the debate on whether the recent rise of structured products means they are suitable to all investors.
