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Investec pulls out of structured product market

11 February 2021

Investec Bank has announced that it will not be issuing any new structured products in the UK retail market from April 2021.

Investec entered the market in 2008 and was a dominant and prolific provider of structured products. The Bank said its decision was a reflection of its shift in focus to its core services for financial advice firms: Discretionary Fund Management and Managed Portfolio Services on Platforms.

As a result, the next launch of new Plans, which takes place from 15 February 2021 to 1 April 2021, will be Investec’s last.

Investec assured investors that all existing Plans (including all investments into Investec’s range of plans) are unaffected by the decision and will continue to function as set out in the relevant brochure, including clients’ rights with regards to encashment. Investec said it will continue to support all existing plans as they continue over the coming years.

Expert commentator on the structured product market, Ian Lowes, managing director of Lowes Financial Management and founder of StructuredProductReview.com, said Investec’s decision to pull out was “a disappointing loss, which will be to the detriment of retail financial services and investors.

“Investec issued their first structured products in 2008 and since then, 1,191 have matured.  Of these 1,171 matured positively, paying an average return of 7.44% per annum. None matured at a loss and 20 returned capital only.”

Lowes said that with Investec being the only consistent issuer of structured deposits, “retail savers have lost access to a very viable alternative to fixed-term deposits and an attractive alternative to equity investment.

He added: “Whilst I don’t expect to see the deposit space filled, I have no doubt that the remaining structured product providers will be able to fill the gap in terms of satisfying demand for capital at risk structures.”

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