Structured Products: A Fiduciary Guide

Tariffs, trade wars and inverted yield curves have combined to cloud the economic outlook for 2H 2020. Stocks have backed off their year highs and yet fixed income offers miserly returns. On October 1, 2019, the CFP Board’s newly-revised Code of Ethics and Standards of Conduct took effect.

The “cornerstone” of the new Standards of Conduct is the expanded obligation to act as a fiduciary at all times when providing financial advice. This is a significant change from prior Standard which required a CFP to act as a fiduciary only when providing financial planning. In Section A of the ‘Code and Standards’, the very first of 15 Duties that CFP professionals owe to clients is a Fiduciary Duty.

Because of CFPs’ enhanced fiduciary requirements, Little Harbor Research’s 2020 CE Program curriculum places special emphasis on a fiduciary’s obligations when considering insured retirement solutions in general and complex, opaque structured products, like medium-term and principal protected notes in particular.

This Program will provide an educated view into the complex and opaque world of medium-term and principal protected notes. It will assist CFPs in satisfying the “Duty of Care” when assessing insured retirement solutions and individual supplemental insurance retirement plans.

Principal protected notes and funds are an attractive alternative investment that can offer both a guaranteed return of principal (subject to the credit worthiness of issuer) and an equity participation component.

Agenda for Structured Products: A Fiduciary Guide includes:

• A Fiduciary’s “Duty of Care” Requirement
• 2015 SCOTUS “Duty to Monitor” Ruling
• FINRA Findings on Structured Products
• The “3Cs” – Cost, Complexity & Conflicts of Interest.
• Structured Products’ Market Overview
• Types of Products incl., MTNs and PPNs
• Anatomy-Protection & Performance Parts
• MTN/PPN Pitfalls, incl. Caps/Buffers, etc.
• Little Harbor Fiduciary-driven Difference
• “LHA Tactical Assurance™ Strategies”