Structured products

Think carefully before you invest in structured products. The income or growth is not usually guaranteed and you may lose all your money. Find out why it's important to understand the product before you decide.

Most structured products are fixed-term investments. The amount you earn, or receive back, depends on the performance of a specific market (such as the FTSE 100) or specific assets (such as shares in individual companies).

There are two main types of structured product:

  • structured deposit
  • structured investment

With structured deposits, the sum deposited is due to be returned at the end of the term.

With structured investments, the terms may also offer a degree of capital protection. So, you could expect to get some or all your money back at the end of the term. 

Think carefully before investing your money

For both types of structured product, the income or growth is not usually guaranteed. You may get no return on your investment.

Even where there is capital protection, the deduction of fees and charges could mean you could get back less than you put in. 

Structured deposits, and structured investment products with some capital protection, are often purchased by customers looking for alternatives to savings accounts or other deposit-based products.

However, these products often have complicated features that can make it difficult to understand or work out the return you are likely to get. Remember:

  • you may have no ability to withdraw your money before the investment term ends
  • you may lose some or all of your initial investment
  • you may get no return on your investment

It is important that you take the time to understand and assess the product you’re thinking of buying before investing. Complex products do not necessarily offer better returns than simpler ones, such as fixed-term deposits.

If you are unsure about how the product works or how likely it is that it will provide a competitive return on your money, you may be better off choosing a simpler product.

You can find out more about structured products from the Money Advice Service.

Structured products are generally complex

Our research suggests that most consumers find it difficult to understand how structured products work in practice, which often leads them to overestimate the potential investment return.

Structured products are generally complex, and the variety of features they contain can make it difficult for you to compare them with alternatives.

We have called on firms to improve the way they design and sell structured products. In particular, our rules require that firms design products that meet the needs of customers.

While structured products can offer an alternative way to invest your money, you should also be aware that:

  • structured products can have several complicated features that define the return you get. This means they are not appropriate for all consumers. Simpler alternatives may better meet your needs
  • if you do not understand the product, what it costs or what the likely returns might be, then ask for more information, seek financial advice, or look for a simpler product

If you’ve bought a structured product and want more information, you should speak to the company or person who sold it to you.