Buying structured finance

Author: | Published: 1 Nov 2007

Structured products, once the domain of institutional investors, have entered the radar of the retail investment community. This has caused excitement and concern in equal measure. The explosion in the number of high-net-worth (HNW) individuals, combined with increasingly sophisticated tastes among retail investors, has created a demand for more tailored and complex investment opportunities. Recently, though, the liquidity crisis forced questions about the ability of retail to understand the potential risks of investing in these vehicles. For a while it seems that structured products, as well as their point of origination and distribution, will come in for closer scrutiny. Rather than being a bad omen, this process may actually complement existing initiatives to bring clarity to an opaque market. It may ultimately ensure the market's long-term growth.

While structured products for the retail market may only now be creating waves in the broader business community, it is by no means...