Financial planners provide main push to capital protected products

financial-planners/financial-planning/financial-advisers/investment-trends/investors/commonwealth-bank/macquarie/

14 May 2012
| By Staff |
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Financial planners play an enormous role in the take-up of capital protected products as the demand coming from investors slowly decreases, according to a report released by Investment Trends.

The 2011 Capital Protected Products Report saw the market in this space decrease by 9 per cent over the past year, with a quarter of investors citing inappropriate market conditions as a barrier to using these products.

"This says that market performance expectations play a key role in driving and hindering investor appetite for these products," said Investment Trends analyst King Loong Choi.

However, financial planners remain persistent in the use of capital protected products in their clients' portfolios.

Loong Choi said more financial planners than in 2010 recommended capital protected products in 2011, and more are intending to recommend them in the coming year.

"Not only are more capital protected product investors using advisers - especially financial planners - three out of five investors said that their adviser was involved in their most recent capital protected product investment, while 44 per cent said they first learnt about this investment from their adviser," Loong Choi said.

However, one of key reasons that prevents planners from increasing their use of capital protected products is their desire for simpler structures, he added.

Of product providers, the Commonwealth Bank had the highest brand awareness among investors, while Macquarie was the most recognised brand among financial advisers.

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