Trade of the month: Secondary pricing and fair value

As with any competitive market, fee levels are influenced to a large degree by the market, since a product cannot normally hide high fees and appear competitive.

Because structured products also have something in common with cash investments and tracker funds at the two ends of the risk spectrum, fee levels must be set so that they do not look uncompetitive compared to these simpler types of investment. An obvious case in point would be a capital-protected product that must have an option that is sufficiently valuable to have a realistic chance of beating cash.

The more complex products are the exception because they cannot easily be compared to other