UK: Retail structured products attract record sales

Story by: Daniel McAllister
FT InvestmentAdviser Magazine

Sales of retail structured products hit a record £9.7bn in 2008 as investors sought to combat low interest rates and stock market volatility, according to Blue Sky Asset Management (BSAM).

The 25 per cent jump in sales was driven by a combination of increased client demand, and a rise in providers and products on the market.

The total number of products issued in 2008 rose by 20 per cent to 985 in 2008.

Chris Taylor, chief executive at BSAM, said investors and wealth managers were increasingly seeking investment options that dealt with the effects of low interest rates and a fluctuating stock market.

He said client demand would continue to drive growth in the market, with retail sales exceeding £10bn for the first time in 2009, despite the tough market conditions.

"A 25 per cent increase in sales, in the current investment climate, proves advisers and investors recognise and value the ability of structured investments to potentially reduce and control exposure to risk, while defining and enhancing future investment returns."

Taylor warned the UK was heading for the exotically titled 'zirp environment', referring to a zero interest rate policy.

He added: "It is abundantly clear wealth managers will need innovative investment products in 2009, if options that can counter non-existent returns on cash and risk/return challenges for traditional equity funds are to be provided to investors, many of whom feel they are now between ‘a rock and a hard place’ in terms of viable and appealing investment options."

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