Advisers are increasingly embracing technology in the UK market to facilitate new product sales and rollover maturities, as well as driving efficiency and cost savings.
Arcus Partners and Socius Technologies have launched a new collaboration to support IFAs active in the UK structured products market.
Under the agreement, Arcus Partners - an appointed representative of Dura Capital has entered a multi-year arrangement to licence the Socius Technologies Structured Product Portal which offers a range of defined return products across a panel of issuers.
IFAs appreciate user friendly, fast and secure services that benefit them and their clients alike - Mark Allan, Arcus Partners
The portal which offers a fully digital structured product solution in the UK market was rolled out earlier this year to the IFA community after Goldman Sachs, Mariana Capital and Socius Technologies partnered to fill the gap left by Investec in the UK structured products market. The Socius Technologies Structured Product Portal was initially launched by Investec Structured Products in 2019.
‘IFAs appreciate user friendly, fast and secure services that benefit them and their clients alike,’ said Mark Allan from Arcus Partners.
‘As traditional work patterns continue to evolve, we believe providing advisers and their clients with the ability to purchase structured products anytime, anywhere through an efficient digital experience will become the standard,’ said David Macdonald (pictured), CEO of Socius Technologies Group Limited. ‘The operational overhead and cost of the equivalent paper-based process will become harder to justify.’
UK structured products provider Dura Capital revamped its senior management team with several industry veterans earlier this year after Zak de Mariveles, the chairman of the UK Structured Products Association (UK SPA), acquired 75% of the former retail arm of Catley Lakeman’s Securities.
Westpac offers investors 25% discount to exit structured products
Westpac is seeking to exit Self-Funding Instalments (SFIs) by putting a vote to investors on bringing forward the completion date of the structured warrants to 17 November 2022 as the bank refocuses on core banking.
The decision follows changes in Westpac’s strategy to simplify its business and focus on core banking in Australia and New Zealand. The wind-down in Westpac SFIs commenced in November 2020 when the Australian bank ceased issuing new Westpac SFIs and moved to ‘bid-only’ support for Westpac SFI trading.
SFIs are a form of structured investment product that allow investors to buy shares in two payments. The first payment is usually between 40% and 60% of the current price of the underlying shares. By making the first payment, investors receive the full benefits and any share price movements, dividends and franking credits.
SFIs include a limited recourse loan, which is equal to an instalment payment - the loan attracts interest, which is calculated and capitalised daily. This means that the loan amount and, as a result, the instalment payment, will increase each day.
Westpac will offer investors a reduction in their loan amount of 25% to support the exit. There are currently less than AU$6 million of loans outstanding in respect of Westpac SFIs held by approximately 90 customers.
Westpac currently has 41 SFIs on issue linked to Australian stocks, funds and ETFs.
Leonteq gets BMR approved
Leonteq has been recognised as a third country benchmark administrator under the EU Benchmarks Regulation (BMR).
This will allow the company to grow its activities beyond the traditional structured products business as it implements its Growth Strategy 2026 aimed at expanding and diversifying its offering across products, asset classes and issuers.
‘We are demonstrating our deep understanding of index management and emphasising our commitment to best practices as we provide investors access to proprietary indices in a transparent and cost-efficient way,’ said Alessandro Ricci (right), head investment solutions and member of the executive committee of Leonteq.
The Swiss company has established a set of policies and procedures for its Leonteq Systematic Indices to ensure the accuracy and integrity of its indices and comply with the BMR – after the completion of the application process the European Securities and Markets Authority (Esma), recognise Leonteq Securities as a third country administrator of benchmarks.
The newly created governance framework includes the establishment of an index committee, which comprises members representing the front office, operations and control functions of Leonteq.
Solactive rolls out US enhanced investment grade play
Solactive has announced the launch of the GBS United States 500 Enhanced Investment Grade Index, which will be used for an investment management mandate from Zurich managed by a global asset manager firm DWS America.
The GBS United States 500 Enhanced Investment Grade Index offers exposure to securities from the top 500 companies in the United States stock market that are not insurance related and have high credit quality. Despite being a pure equity portfolio, the index screens stocks using the issuer’s credit-rating concept, which is generally employed on fixed-income products.
The index uses the Solactive GBS United States 500 Index as a starting point. In a second step, securities of companies assigned to any of the following insurance-related industries are excluded from the universe: multi-line insurance, life/health insurance, insurance brokers/services, property/casualty insurance, and specialty insurance.
Lastly, the companies that constitute the index must also have a long-term issuer credit rating higher than or equal to A3, according to Moody’s rating scale, or A-, according to Standard & Poor's or Fitch’s Ratings rating scale,or not being rated by all the agencies and without any debt outstanding.
‘In an economic environment mined by increasing interest rates and fear of recession looming over multiple economies, investors might seek refuge in companies that are financially more solid and creditworthy,’ said Timo Pfeiffer (above-right), chief markets officer at Solactive.
Morningstar Advisor Workstation users to get Canada data
Luma Financial Technologies has reached an agreement with Morningstar to launch Canadian structured products data within Morningstar Advisor Workstation.
Following the agreement, advisors and other financial professionals using Morningstar Advisor Workstation will be able to analyse, manage, and allocate Canada structured products in an overall client portfolio context.
As the popularity of structured products continues to grow in Canada it is important ‘to help investors make better informed decisions and drive the use of more suitable investment decisions that match client objectives’, said Scott Mackenzie (right), president and CEO of Morningstar Canada.
Morningstar has been using data provided by Luma since Q1 22 – the financial services firm is seeking to provide deeper classification of structured products for financial professionals to be able to see the impact to a client’s investment plan.