What every IFA should know about structured products in 10 minutes

2 June 2026

Structured products are often filed under "too complicated" before they've been properly considered. Part of that is understandable: the documents can be technical, the language isn't always familiar, and the category still carries assumptions from the past. But the underlying concept is much simpler than the paperwork tends to suggest.

A structured product sets out a defined outcome, linked to the performance of an index or basket of indices. The investor doesn't own the index. Instead, the plan explains what happens if certain conditions are met, and what happens if they are not. Defined outcomes, under defined conditions; that's the starting point.

The five questions advisers should ask

Most structured product conversations should begin with five questions.

What is the underlying?
The underlying is the market measure the plan is linked to. In a typical autocall, the plan reviews the index on set observation dates; if the index is at or above a specified level on one of those dates, the plan matures early, returns capital and pays the defined return.

A single-index plan is usually easier to follow because there is one market level to track. A multi-index plan may offer different terms, but the outcome can depend on more than one index, and in many cases on whichever index in the basket has performed worst. Clarity is the starting point: what is the plan linked to, what level does it need to be at, when is it tested, and can that be explained simply to the client?

What is the return condition?
The return condition sets out what needs to happen for a return to be paid. An autocall may mature early if the underlying is at or above a specified level on an observation date. A step-down plan may reduce that required level over time. Some defensive structures allow a positive return even if the index is below its starting level.

This is one of the more useful features of structured products: the return doesn't always require the market to rise. In some structures, the client may still receive a positive return if markets are flat or moderately lower. However, the condition needs to be understood before the plan is selected.

When is capital at risk?
Capital at risk is usually linked to a barrier. In typical plans, if the underlying index is not below the barrier on the final day, capital is returned in full; if the barrier is breached on the final day, capital may be at risk and losses may reflect the fall in the underlying. A deeper barrier provides more headroom, but every plan needs to be assessed on its own terms.

Structured deposits work differently: they offer 100% capital protection at maturity and qualify for FSCS protection up to applicable limits, subject to eligibility. Their role in a portfolio is usually distinct from capital-at-risk plans, and it's worth keeping that distinction clear.

Who is the counterparty?
Structured products carry counterparty risk. The client is relying on the issuing bank or counterparty to meet its obligations. That doesn't make a product unsuitable by itself, but it does make counterparty selection, diversification and ongoing due diligence important considerations. Advisers should be comfortable not just with the terms of the plan, but with the institution standing behind those terms.

What role is it playing in the portfolio?
This is the question that matters most. Structured products shouldn't be selected because the headline coupon looks attractive; they should be used because they have a clearly defined role in the client's wider plan.

For a client approaching retirement with a specific portfolio goal, that role may be to target the desired outcome more deliberately, while reducing the risk of falling materially short if markets are flat or moderately lower. For a client already in drawdown, it may be to provide an alternative source of potential returns, or to use capital-protected structured deposits for income matching during the early retirement window, reducing the need to draw from the investment portfolio when markets are weak and giving it more time to recover.

Without a clear role, the product becomes a tactical idea rather than part of a properly considered planning framework.

What structured products are not

Structured products are not a free lunch. They don't remove risk entirely, and they don't replace suitability, diversification, asset allocation or ongoing review. They are also not all the same; the level of protection, potential return, underlying index, term and counterparty can vary meaningfully between plans.

The trade-off is worth understanding clearly. In order to offer defined outcomes, capital protection features, or the potential to generate positive returns in more difficult market conditions, structured products sacrifice some potential upside. The client isn't participating fully in unlimited market growth; instead, they're exchanging some of that potential excess return for a more defined return profile.

Blanket statements about the category, positive or negative, rarely hold up. The structure matters. The terms matter. The level of protection matters. Most importantly, the role in the client's wider plan matters.

Why advisers are taking another look

The renewed interest in structured products is partly being driven by retirement planning. More clients are approaching or entering drawdown, and that shifts what the portfolio needs to do. It isn't just there to build wealth over the long term anymore; it now needs to support income, manage the timing of returns and continue providing growth for long-term sustainability.

A client's existing investment portfolio can remain central, continuing to provide diversified market exposure and long-term growth potential. However, around retirement, the portfolio may benefit from additional tools that behave differently.

This is where structured products can earn their place. The value isn't simply that a plan may pay a defined return; it's what that return profile can do within the wider portfolio. It can help a client approaching retirement stay on track towards a specific goal. It can give a drawdown client another source of potential returns or planned maturities during the early retirement years. It can reduce the pressure to sell growth assets at an unfavourable moment.

Used properly, structured products are not tactical product ideas. They are deliberate planning tools.

Walker Crips' track record across plans launched between 16 December 2009 and 31 March 2026 shows 1,781 plans launched, a 99.51% positive return rate, a 7.88% average annualised return and zero capital losses. That's not a guarantee and it's not a forecast; past performance is not a guide to future returns. But it is a useful reference point when assessing how well-governed structured products have behaved in practice.

The adviser takeaway

Advisers don't need to use structured products for every client, and they certainly don't need to replace clients' existing investments. But they do need to understand the category properly. A comprehensive advice process should be able to assess the full range of mainstream investment solutions and identify where, if at all, each one has a role.

For the right client, in the right structure, with the right governance, structured products provide another tool alongside the client's existing portfolio. In retirement planning, a different shape of return can matter just as much as the expected return.

If you'd like to discuss how structured products could complement your current investment and retirement proposition, I'd welcome the conversation. Please contact me on 020 3100 8157 or joe.simpson@wcgplc.co.uk.

Joe Simpson
Director, Investment Management

Structured products are capital-at-risk investments and are not suitable for every client. Past performance is not a reliable indicator of future results. This article is for professional advisers only and does not constitute advice.

The value of any investment can go down as well as up, and you may get back less than you invest. Walker Crips Investment Management Limited is authorised and regulated by the Financial Conduct Authority (FRN: 226344).