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Jargon Buster - I

Income Products

Income products are those that offer a potential income stream during the term of the product. See also 'Product Type'.

Index/Indices

In financial markets, an index measures the performance of a portfolio of securities representing a particular market (for example, UK equities). Each Index has its own calculation methodology and is usually expressed in terms of a change from a base value. Most Indices used as Underlyings for structured products will be ‘price return’ Indices, meaning that they measure the performance of the constituent shares only. The performance of ‘total return’ indices will also include the effect of any dividends or corporate actions on the constituent shares.

Inflation Risk

Inflation is the general change in the prices of goods and services over time. If inflation is positive, this means that goods and services are generally becoming more expensive. Inflation risk arises because the repayment of capital and any return offered by most structured products will not be adjusted for any inflation experienced over the investment term.

Initial Capital

The amount of money an investor uses to purchase a Structured Product.

Initial Investment

The amount of money an investor uses to purchase a Structured Product. Please also see ‘Capital’.

Initial Level

The level of an Underlying that is used as the starting point for its performance (i.e. the performance of the Underlying is its Final Level in relation to its Initial Level). Please also see ‘Start Level’.

Intermediary Fees

How investors pay for financial advice has changed since the Retail Distribution Review. For structured products, advisers are no longer able to take commission for recommending a Structured Product to a client (please note that commission can still be charged for a Structured Deposit). Instead, investors may pay a fee to their intermediary for the advice given (or the execution-only service, as appropriate). Most providers of structured products will facilitate the payment of Intermediary Fees on an investor’s behalf. In this case, an investor will pay one lump sum to the provider, and the provider will then pay the proportion of the amount that makes up the Intermediary Fee directly to the intermediary. Please also see ‘Adviser Charging’.

Investment Term

The lifespan of a Plan (from its Start Date to its End Date).

ISA

An ISA is a type of tax wrapper. Any returns received from an ISA are currently not subject to tax. There are two types of ISA: Cash ISA or Stocks and Shares ISA. Only one Cash ISA and one Stocks and Shares ISA can be subscribed to in each tax year, as long as the combined amount does not exceed the current annual ISA allowance of £15,000.
The tax treatment of investments will, amongst other things, depend on an individual’s circumstances. If in doubt, investors should consult with an appropriate professional adviser to ascertain for themselves the taxation consequences of acquiring, holding and/or disposing of any investments mentioned on this website.

ISA Regulations

The Individual Savings Account Regulations 1998, as amended or replaced from time to time.

Issuer

The institution responsible for issuing a Structured Product. Please also see ‘Counterparty’.

We've put together a glossary of terminology associated with structured products.

While these are standard definitions, it's important that you read the relevant product literature before investing, as providers might use a slightly different definition to those detailed here.

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Representing the collective interests of leading structured product manufacturers in the UK

The UK Structured Products Association ('UKSPA') is a membership organisation established by the leading manufacturers of structured products in the UK. UKSPA provides a unified voice for its members, working with regulators, financial advisers and other trade bodies. It serves a number of important functions, including engaging with regulators, developing best practice guidelines, educating the investment community and providing a useful source of information for manufacturers, financial advisers and retail investors within the UK.

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