Planned SPA risk indicator is no panacea, say critics

The UK Structured Products Association has pledged to introduce numerical risk ratings in all retail brochures to help provide transparency and educate investors, but some market participants say a risk number is the wrong way to go and could provide a false sense of security. Jack Prescott reports

Zak de Mariveles, UK Structured Products Association

There has been no shortage of guidance from the UK Financial Conduct Authority and its predecessor the Financial Services Authority in the past few years regarding what is appropriate regarding the promotion and marketing of investments. When selling a product, for instance, the payout structure, counterparty risk and historic performance all must be clearly stated in terms that a non-sophisticated investor can understand.

But this does not always mean that investors are left with a greater

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