What are 'complex financial products'?

An arbitration award that related to the sale of a 'complex financial product' illustrates the problem that ordinary investors face when offered these products. In nearly all such situations they find themselves at a severe disadvantage vis-a-vis the salesperson or financial adviser. It is like asking the patient to make a judgement about the correct procedure when faced with cancer. So trust is of paramount importance in any relationship between an investor and financial professionals. Sadly, we can only recommend to always get a second opinion from a neutral expert before buying any financial instrument as the layman cannot really know when an investment vehicle is 'complex' enough to warrant special caution and analysis.

Do you know how a 'Mezzanine Certificate' functions?

We have to admit that even after 40 years working in the financial markets or with financial instruments we have only the haziest notion of how such an investment instrument is structured. So it is no wonder that a major financial institution is being sued by German investors who have been sold such a product. As always we advise investors to be vigilant and not buy investment products that they do not fully understand.

Alphabet soup with 'certificates'

If anyone wants proof that the proliferation of investment 'certificates', warrants and other structured products has gone too far he only needs to look that Deutsche Bank's website for its x-markets products. I would hazard a guess and estimate that not even 5 per cent of all market professionals in stock exchange departments or investment management firms would be able to understand ALL listed products. Does anyone other than those involved in the manufacturing of these investment vehicles really master all the intricacies of their behaviour? We advise investors to be on the lookout and be vigilant in case their financial advisers try to put such structured investment products into their portfolios.