The Structured Products Academy

An academy for investors who want to know more about structured products.

Welcome to a new section of our website … 'The Structured Products Academy'
For investors who want to understand more about structured products

As part of our aim to provide exceptional support, our Academy offers an educational resource for investors wanting to know more about structured products.

Module 1: An introduction to structured products

Download Module 1: Powerpoint Presentation

This Module aims to:

  • Provide an introduction to structured products
  • Highlight how structured products can meet investors’ interests and needs
  • Explain how structured products are different from other types of investment
  • Explain the roles of different participants in the structured products market
  • Explain why investment banks issue structured products
  • Explain the different types of structured product available to investors
  • Highlight the key risks associated with investing in structured products

Module 2: Understanding structured products

Download Module 2: Powerpoint Presentation

This Module aims to:

  • Highlight some of the factors currently characterising investment markets, and the ongoing challenges facing savers and investors
  • Provide a brief and simplistic look at how the UK retail structured product market has developed over the years and show how the UK market compares to other regions globally
  • Explain some of the fundamental reasons why investors should consider including structured products in portfolios
  • Explain why the most important fact to understand about structured products is that they equate to ‘investing by contract’ … and to detail the benefits of this for investors
  • Explain what investment banks might (or might not) do when arranging / hedging structured products
  • Explain the different types of stock market protection that can be used in structured products

Module 3: Issuer & Counterparty Due Diligence

Download Module 3: Powerpoint Presentation

This Module aims to:

  • Explain the role of issuers / counterparties and the importance of professional advisers assessing counterparty financial strength in relation to structured products
  • Explain counterparty due diligence metrics and considerations
  • Explain what ‘credit ratings’ are, the background to credit rating agencies and the different credit ratings used
  • Explain what ‘credit default swaps’ are, how they can provide an independent, market-driven measure of counterparty strength - and how CDS spreads can be used alongside credit ratings
  • Explain what is meant by ‘fundamentals’ and how consideration of fundamentals can form part of a rounded approach to counterparty due diligence
  • Explain the relevance of ‘Tier 1 Capital’ and ‘Tier 1 Capital Ratios’ and why these are important metrics
  • Explain what is meant by a ‘systemically important’ bank and the regulatory capital adequacy requirements that apply to systemically important banks
  • Highlight regulatory changes pertinent to improving the capital adequacy and financial strength of the banking sector and individual banks post the 2008 financial crisis

Module 4: What issuing banks may (or may not) do when arranging structured products

Download Module 4: Powerpoint Presentation

This Module aims to:

  • Explain the process that issuing / counterparty banks may employ when arranging (‘hedging’) structured products
  • Highlight that structured products fundamentally differ from ‘actively managed’ and other types of investments as they equate to ‘investing by contract’, without the performance / process risk of other types of investment, such as mutual funds
  • Explain the different building blocks that issuing / counterparty banks may use in their process of arranging (‘hedging’) structured products, including zero coupon bonds and call and put options (derivatives)
  • Provide some simple background regarding derivatives, their history and to explain the different uses of derivatives today and what types of investor might use them
  • Explain the factors that can impact the cost / price of these building blocks
  • Explain how the building blocks and pricing of ‘capital at risk’ structured products differs from protected structured products and structured deposits
  • Provide product examples that highlight the use of the building blocks and the process that issuing / counterparty banks may employ when arranging (‘hedging’) structured products

Structured Products Investor newsletter

We are also delighted to be able to introduce a new client newsletter, the Best Price FS Structured Products Investor, with the support of Tempo.

Contributing journalists will include the highly respected Financial Times ‘adventurous investor’ columnist, David Stevenson.

The first publication also features an article written by the global head of Tempo, Chris Taylor.

Want to stay up to date with the latest structured product news?