Growthbuilder - but is it building your wealth?

A new structured product has just been launched in the UK and it carries the promising name 'Growthbuilder'. But before you rush to sign on the dotted line potential investors should ask themselves if they understand the complicated option strategies that are packaged into this product. Only then they could be assured that they buy the product at a fair price and are not charged excessive mark-ups by the vendor. And even if they - or their unbiased advisor (who has no financial interest in the sale of the structure) - can understand the sophisticated mathematical models it does not mean that an investment should be made. All option strategies suffer from the defect that investors have to be extremely accurate in their timing - in addition to the already difficult task of choosing the right investment in the first place. The Libyan Investment Authority found that out to its not inconsiderable cost (which in its case surpassed the billion dollar mark quite comfortably). Dealing with sophisticated investment professionals that are incentivised by commission payments should only be undertaken with extreme care and 'Buyer beware' should be foremost on any investor's mind.

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.