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New FOS data shows structured products as best in class

21st March 2016: Recent data released from the Financial Ombudsman shows that out of the 3,128 complaints relating to investment-linked products in the past year, only 37 complaints were about structured products. This means that, for the second year running, structured products are the least complained about type of investment-linked product. It is also worth noting that complaints relating to structured products are the lowest category across every category of new complaints received by the FOS, not just investment-linked products.

This positive news for structured products comes at the same time that many advisers have raised fears over the absence of a longstop and future liabilities when giving advice on investments, and with the recent Financial Advice Market Review from HM Treasury and the FCA recommending that the FCA explore risk-based levies for FSCS as well as considering a review of Professional Indemnity Insurance (PII).

Research commissioned by the UKSPA into PII cover and structured products in 2014 showed that many advisers felt penalised by PII providers for doing structured products business, however the latest complaints data should challenge any such PII providers to reassess their assessment of structured products on a more positive risk-based basis.

Zak De Mariveles, Chairman of the UKSPA, comments:
"While complaints relating to structured products have already been low in recent years, it is incredibly encouraging to see the number of complaints falling even further. Complaints relating to structured products have fallen 29% in the past year alone. these figures reflect the significant efforts that our members have gone through to improve the industry, both by working to build robust product governance frameworks and by following 'best practice' examples established by the UKSPA. As an association, we are committed to continuing our work with members to improve the industry even further, by looking at every aspect of the services we offer from product design to distribution, and making sure that investor needs are met at every stage."

Examples of how the UKSPA has worked with members to improve the industry in recent years includes:
  • Introduction of clear UKSPA Product Codes and UKSPA Risk Ratings, to help distributors identify the right products for investors
  • Extensive consumer research to help manufacturers design products that meet genuine investment needs
  • Publication of 'best-practice' stress-testing and benchmarking guidelines for members, to help ensure products offer good value for money for investors

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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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