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Investec withdraw from the UK structured products sector - 10/02/2021

Ian Lowes, Managing Director

It’s been rumoured for some while that Investec were pulling out the market and it’s really a little sad to see that day come - the next, and last, tranche of Investec structured products will be on offer from 15th February 2021 to 1st April 2021. Investec have reached the decision that structured products are no longer their preferred method of raising retail funding, not least given increased regulatory costs associated with the distribution of structured deposits, and as such has shifted its focus to other core services.

Investec have been the dominant player in the sector since 2008, with a consistent range of both deposit and capital at risk products that have, with very few exceptions proven to be very beneficial for the investors. To date 1,191 Investec structured products have matured and of these, all but 20 produced positive returns, with the 20 simply returning capital with no losses. The average return was 7.44% per annum – which by any measure is admirable but particularly so when recognition is given to the fact that most products protected capital from all but the most extreme circumstances.

Investec’s departure from the market is not therefore great for retail investors, or indeed their financial advisers who correctly identified the value in these propositions for their clients. Whilst I do not expect anyone will step into Investec’s shoes in terms of offering structured deposits, anytime soon, I expect the independent structured product providers will be more than capable of satisfying the increased demand for capital at risk structures, utilising a variety of counterparty banks.

All existing Investec structured products are unaffected by the decision to withdraw form the market and they will continue to function as set out in the relevant brochure, including clients’ rights with regards to encashment. Investec will continue to support all existing Plans as they continue over the coming years.

If you have any queries regarding Investec’s announcement, please don’t hesitate to contact us

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