UK firm targets issuers ans distributors with analysis to match regulatory requirements around expected return, attitude to risk, worst case scenario, etc
Levendi Research, the research arm of Levendi Capital, has launched a new service for UK financial advisers that use structured products.
It has been designed to make it easy for advisers to identify a shortlist of products that may be suitable and appropriate, and then to filter this list to select the best product. The service aims to include all structured products available to retail investors in the UK.
The new service will make it easier for distributors to meet their Mifid 2 obligations, according to David Stuff (pictured), managing partner at Levendi Capital.
“Distributors need to be able to show that products are suitable and appropriate by demonstrating that a product matches the criteria that must be used to describe the investor,” said Stuff. “This means that they need values for expected return, attitude to risk, worst case scenario etc. The new site makes it easy to filter and sort and rank products to identify a short list of products from which an adviser can select the best product.”
The detailed analysis of each product includes a Mifid 2 checklist and detailed scenario analysis, and provides a quantitative assessment of each product using the mandatory criteria for defining a client as defined by the Mifid 2 regulations and two other comparative measures that the UK Financial Conduct Authority (FCA) requires.
The analysis meets demand from independent financial advisers (IFAs) and other distributors for the information that they need to be able to identify and recommend structured products to their clients, said Stuff.
The new service will enable manufacturers to list their products and restrict access to their products to specific clients/distributors, and can also calculate the values for a Kid or use the Kid provided by the manufacturer providing a new mechanism for distributing the Kid. Other applications will allow adviser groups to create fettered lists of primary and secondary products that they have approved, while platforms, pension providers and other facilitators can provide the analysis to advisers/investors that use their services.
The service also covers post-strike products and a weekly re-run of the analysis, considering the current level of the product and underlying markets allowing advisers to keep investors up-to-date about the returns that they may receive and the risks that they face.
The new Levendi Research site is a shop window for the firm’s analysis and is part of its efforts to establish Levendi as a market-leading provider of structured products research, said Stuff.
“Our target market includes IFAs, wealth managers and the institutional market,” he said, adding that it’s a natural move for Levendi because it leverages its risk calculation capabilities to offer analysis to distributors that use structured products.
“Bespoke versions of the new service have application for private banks and wealth managers that want consistent analysis of the products they use. But it’s also relevant to manufacturers and issuers that want to provide information and analysis to their distributor partners about the products they have issued. Platforms and pension providers may want to use the analysis as part of their due diligence or to make it available to advisers that use their services.”
The new service which is based on Levendi Capital’s Investment Product Research market/issuer risk methodology, is free to use for IFAs. Levendi is an active player in the UK structured products market and has a live open ended fund of structured products - the Levendi Thornbridge Defined Return Fund.