Editorial comment: Questioning report ‘findings’

Virginia-based Securities Litigation and Consulting Group (SLCG) has issued a report titled “Are Structured Products Suitable for Retail Investors?” The simple answer is ‘no’, according to the 18 page document. The economics consulting firm won’t win the ‘most inventive report title of year’ prize. And it certainly won’t win any awards for thought provoking or unbiased research.

“Equity-linked notes are a type of structured product issued by brokerage firms and traded in the secondary markets like shares of common stock,” the report notes. “Once sold only to sophisticated investors, structured products are increasingly being sold to unsophisticated retail investors. Equity-linked notes are difficult to evaluate and monitor, have high hidden costs and are illiquid. They are therefore virtually never suitable for unsophisticated investors.”

Using three examples of actual