Market Perspective
  •  4/2/2020

Structured Investment Highlights for Financial Advisors and Investors

By Jason Broder

As investors and advisors alike work to make sense of the rapidly changing economy, it strikes me there are three time-tested approaches that can help us reach the other side of the current challenges we all face:

  • Developing thoughtful plans;
  • Communicating more effectively and frequently; and
  • Having confidence in our plans to see them through—together.

Social connections take on heightened importance in times of uncertainty, and the relationships we build and maintain through crisis stand because of the shared experiences that bring us together.  I think about that when I consider the vision of SIMON’s team, which is to empower advisors to serve their clients—our success relies on our ability to support client-advisor engagement through more personalized experiences.  Around the world, technology plays a key role in how we build connections, share resources, and how we will get through the current environment together. With that in mind, here are a few thoughts on the structured investments market, from my perspective as CEO of SIMON.

  • Markets. Unlike the 2008 Global Financial Crisis, the underlying economy and equity markets were incredibly strong going into the COVID-19 crisis, as illustrated by employment numbers and record highs of the S&P in February.  Several economists have also noted that once the curve for COVID-19 flattens, we could see a U or V shaped recovery in both the markets and the broader economy. While brighter days may be ahead for both, there could be many lingering effects of COVID-19, including potential continued volatility into year end.
  • Education. Structured investments remain important products in these times, but education around these products needs to be more prevalent and consistent. Thanks to (1) educational requirements at the distributor level, (2) the availability of better educational tools, and (3) issuers starting to adapt to standardized product nomenclature—the latter two being particularly large focuses for SIMON—product understanding and market transparency are rapidly evolving for the better. If increased offerings in the marketplace are any indication, the impact of better product education is clear.
  • Diversification. Today’s structured investment buyer utilizes these products as a core component of a well-diversified, sound financial plan. They do so with a focus on the long-term value add, which is very different than 10–15 years ago when advisors used these products much more tactically, often missing the larger potential for notes.
  • Simplicity. The mix of product offerings is much simpler than it was 10 years ago; most structured investments are still more complex than an ETF or mutual fund, but on the whole the majority are index-linked and the payouts have a lot fewer bells and whistles than they did in years past, which makes them easier to understand with product education, and easier to manage over the long term.
  • Protection. Portfolio protection is a core consideration in any market, and structured investments are one of the easiest ways to build it in. Our team recently ran an analysis of 25,000+ structured investments on SIMON’s platform to gauge their performance in today’s market, and the results posed a powerful story for built-in protection features. The complete analysis is available here: Market Analysis: A Powerful Story for Structured Investments.

With continued volatility, equity market declines, depressed oil prices, and record low Treasury yields driven by COVID-19, advisors need access to products that can help mitigate downside risk while simultaneously providing upside exposure to the market. However, product education and transparency, powered by technology and innovative analytical tools, will help deliver a clearer understanding of how to balance upside participation with downside protection.  At SIMON, we’ve focused on providing advisors with an end-to-end structured investments solution because we believe by empowering them with access, education, and analytics, they are able to build better bonds with their clients. That’s why we’re expanding these efforts into the annuities industry as well.

While we’re faced with a lot of uncertainty now, I’ve never been more thankful for the power of smart technology, and the vital role it plays in bringing us all together.

Be smart, be safe, and take care.

©2020 SIMON Markets LLC. All Rights Reserved. Views expressed only represent the current views of the author as of the date appearing on this material, and are not those of SIMON Markets LLC, unless otherwise expressly noted. This is not intended to be an offer or solicitation to purchase or sell any security or to employ a specific investment strategy. Securities products and services offered by SIMON Markets LLC, a broker-dealer registered with the U.S. Securities and Exchange Commission, a member of FINRA / SIPC. Annuities and insurance services provided by SIMON Annuities and Insurance Services LLC. Please visit for complete disclosures, including terms of use and privacy policy.

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