If Clients Don’t Understand Structured Products, They Won’t Invest!

Structured products can be powerful tools in an investment portfolio, offering customized risk-return profiles, capital protection, and enhanced returns. However, due to their complexity, many financial advisors, wealth managers, and private bankers find them challenging to market effectively.

Clients often struggle to understand how structured products work, why they should consider them, and how these investments compare to traditional options like mutual funds, stocks, or bonds. That’s why a strong, clear marketing approach is critical—one that simplifies complex concepts, builds trust, and engages clients at various levels of financial literacy.

In this article, we will explore the most effective ways to market structured products, ensuring that clients understand their value and advisors can confidently present them as part of a well-balanced wealth strategy.

1. Know Your Target Audience

Marketing structured products effectively starts with understanding who you’re speaking to. Not all investors think the same way—some focus on growth, others prioritize stability, and many are looking for a balance between the two. If the value of structured products isn’t positioned in a way that aligns with their investment mindset, they won’t engage.

To make structured products relevant, start by answering three key questions:

• What is the client’s investment goal?
  Are they aiming to generate income or capture market growth?
• What is their investment horizon?
  Are they comfortable committing to a long-term plan, or are they seeking quicker returns?
• What is their risk tolerance?
  Some clients are comfortable with higher risks, while others prioritize safety and stability.

Personalize Your Approach

Instead of using a one-size-fits-all message, customize your marketing materials and sales pitches based on the client’s level of expertise and investment objectives.

Worth reading! How client biases shape wealth decisions and what wealth managers can do

2. Simplify Your Product Design: Clarity is Key

One of the biggest hurdles in selling structured products is overcoming complexity bias—the perception that if something is too complicated, it must be risky or not worth the effort to understand.

How to Make Structured Products More Accessible

• Avoid technical jargon and focus on simple, relatable explanations. Instead of saying, “This product offers participation in an underlying asset’s upside performance with a barrier mechanism to limit downside risk,” say, “This investment allows you to benefit from market gains while providing a cushion against losses.”
• Use comparisons to traditional investments to highlight advantages. If a client is familiar with bonds, explain how a structured product might offer similar capital protection but with a better return potential.
• Present clear risk-reward tradeoffs—explain potential gains, the worst-case scenario, and the probability of different outcomes in a way that’s easy to digest.

The easier you make it for clients to understand structured products, the more likely they are to see their value and invest.

3. Use Visual Aids and Real-World Examples to Enhance Understanding

People process visual information 60,000 times faster than text, making infographics, charts, and real-life examples essential tools in structured product marketing.

Effective Visual Tools

• Performance Scenarios: Show different potential outcomes in a rising, flat, or declining market.
• Comparison Charts: Illustrate how structured products compare to traditional investments in terms of risk and return.
• Client Case Studies: Demonstrate real-world applications, such as a retiree using a structured product for income generation or an aggressive investor using it for leveraged exposure.

By incorporating visuals, you not only simplify complexity but also enhance client confidence in making informed investment decisions.

4. Educate and Inform: Becoming a Trusted Advisor

Because structured products are not as well understood as stocks or bonds, education is key. The more informed your clients are, the more confident they will be in investing.

Ways to Educate Clients Effectively

• Host Webinars & Live Q&A Sessions: Explain structured products in an interactive way, allowing clients to ask questions in real time.
• Create High-Value Content: Publish articles, whitepapers, and newsletters that break down structured product concepts in a digestible format.
• Use Video Marketing: Short, engaging explainer videos can significantly improve understanding. Studies show that viewers retain 95% of a message when they watch a video, compared to 10% when reading text.

By consistently providing valuable insights, you position yourself as an expert, increasing client trust and engagement.

5. Address Common Objections and Concerns Proactively

Clients will always have concerns—your job is to anticipate objections and address them head-on.

Key Concerns & How to Overcome Them

1. “Structured products are too complex.”
   • Solution: Provide simple explanations, analogies, and case studies that make the benefits clear.
2. “What if the market crashes?”
   • Solution: Highlight downside protection features and historical performance in volatile markets.
3. “Are these investments liquid?”
   • Solution: Be upfront about liquidity risks and explain alternative exit strategies, such as secondary market sales.

Proactively addressing these objections removes barriers to investment and builds credibility.

6. Build Trust and Credibility: Relationships Drive Sales

Trust is the most critical factor in selling financial products. If clients don’t trust you, they won’t invest with you.

How to Build Trust with Clients

• Provide Transparency: Clearly disclose risks, fees, and potential downsides. Honesty builds credibility.
• Share Success Stories: Use testimonials and case studies to showcase real-life benefits.
• Leverage Thought Leadership: Contribute to financial blogs, attend industry events, and publish market insights to establish yourself as an expert.

Clients are more likely to invest in structured products when they trust the advisor presenting them.

7. Ensure Easy Access to High-Quality Marketing Materials

Even the best marketing materials won’t help if they are hard to find or distribute.

Best Practices for Marketing Collateral

• Maintain a digital library of brochures, FAQs, and explainer videos for advisors and clients to access easily.
• Ensure materials are mobile-friendly so they can be viewed on smartphones and tablets.
• Utilize automation tools to deliver the right content to clients at the right time, enhancing engagement.

Making your marketing resources accessible and convenient helps advisors educate clients more efficiently and improves sales success.

Final Thoughts: The Key to Successfully Marketing Structured Products

The secret to effectively marketing structured products lies in simplification, education, and trust-building. Instead of overwhelming clients with technical details, focus on clear, relatable messaging, visual storytelling, and proactive engagement.

By following these best practices, financial advisors and private bankers can transform structured products from intimidating investments into attractive, accessible wealth management tools.

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