Structured products

We want firms to improve the way they design and then distribute structured products to investors. Find out what we expect from product providers and what this means for you.

Structured products are generally a type of fixed-term investment where the amount you earn 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

Some structured investments offer a degree of capital protection, while others do not. The income or growth is usually not guaranteed and 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 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 and other deposit-based products. However, these products often have complicated features that can make it difficult to understand the return you are likely get, including the risk of getting 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 offer a competitive return on your money, you may be better off choosing a simpler product.

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

Our view on structured products

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, we have asked firms to ensure they design products that serve the needs of customers.

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

  • structured products can have a number of 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, in particular what it costs and what the likely returns might be, ask for more information, consider seeking 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