Structured Product Guide

Financial Services Compensation Scheme (FSCS) provides a safety net if a financial institution fails to meet its deposit obligations to you, you should receive compensation of the full amount up to £85,000 per person (so if the deposit is held jointly, the compensation amount is then capped at £170,000). There are several other arrangements depending upon the characteristics of a particular investment and not all types are covered, more information can be found at FSCS.org.uk. The FSCS is funded by a levy on all financial services firms authorised by the Financial Conduct Authority. as FSCS would not apply (hence the rarity). Having said that we have recently seen the release of a structured deposit within an insurance product and while the deposit compensation arrangements would not apply, those relating to longterm insurance business – typically life and pension contracts – may well, but not in relation to the investment element of the product, i.e. the deposit. In summary, it’s a tricky navigation through the available fall back protections and when it comes to an advice process that leads to a recommendation of a capital protected investment, we at Lowes would almost always choose the deposit format alternatives (should they exist).

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