The Financial Services Authority (FSA) has downgraded the risk priority of structured products and Ucits IV.
The two product types are no longer seen as “highest priority” products by the regulator in its latest Retail Conduct Risk Outlook.
Although sales of strucured products have grown significiantly, the FSA believes that guidance it has issued “will significantly reduce consumer detriment for structured deposits”.
The FSA says concerns over the quality of ongoing advice in regard to the replacement of the simplified prospectus under the Ucits IV regime with the key investor information document, was not a “key source of conduct risk”.
The regulator adds: “This does not mean we are not concerned about these areas or that firms should not be concerned about the related risks.”