Trade of the month: fees, profit and risk in structured products

Commission is not always taken on a product, and the UK Financial Services Authority has declared in its Retail Distribution Review that commission will be prohibited after 2012. At the moment, the commission level and the distributor fee are generally disclosed. These are fixed amounts provided for by the choice of the product structure and ‘left over’ after the proceeds from the investors are paid to the investment bank to purchase the derivative or other assets.

It is probably true that the pr

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