Editor's letter

Editorial

First, a word of warning: news that the UK market is contracting and the French market stagnating means this month's issue doesn't make for cheery summer reading.

In our cover story we look at how the UK market has shrunk for the fourth time in five years, and we also tell how Bristol & West, previously a market leader, has decided to exit the business. There seems to be suspicion on the part of independent financial advisers (IFAs) about structured products. Bravado by some UK distributors that say IFAs are advising clients to buy into structured products hides the reality that derivatives-based investments have failed to capture the imagination of IFAs or the investing public in quite the same way as they have on the Continent. In fact, IFAs say the UK market is inundated with copycat products that possess about as much appeal as in-flight meals. A touch of creativity is urgently required if the UK market is finally to prosper. Thankfully, it seems a few distributors are finally realising this, and we eagerly await news of more interesting bespoke products in the hope that other distributors don't go the same way as Bristol & West.

The French market is also suffering to a certain extent. Volumes may be up, but only just. Quite simply, more competition is required in a country that was previously famed for its structured products innovation. Investors are tired of the same old payoffs, but few companies are bothering to offer alternatives. Thankfully, Exane, for one, is bucking the trend and pushing commodity-linked products. And an amendment to French law - which lets investors convert their non-unit-linked life insurance contracts into a multi-investment policy without forfeiting tax benefits - could spur a whole host of innovative new offerings.

The lesson is that distributors and structurers must constantly explore new areas and react decisively to changing market conditions if structured products sales are to grow.

But which structurers are best placed to deliver innovation? You have the chance to tell us who you rate in our inaugural European survey. Look out for details of our monthly polls, starting in August.