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Doctoral Thesis / Dissertation from the year 2017 in the subject Business economics - Offline Marketing and Online Marketing, grade: 1,0, , language: English, abstract: The market for retail investment products is traditionally dominated by saving deposits, various types of funds, and life insurance products. The liberalization of the capital market in the 1990s and the foundation of option exchanges gave more investors access to derivative products. Financial institutions started to manufacture investment products as a combination of zero-coupon bonds or shares and derivatives. Structured…mehr

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Doctoral Thesis / Dissertation from the year 2017 in the subject Business economics - Offline Marketing and Online Marketing, grade: 1,0, , language: English, abstract: The market for retail investment products is traditionally dominated by saving deposits, various types of funds, and life insurance products. The liberalization of the capital market in the 1990s and the foundation of option exchanges gave more investors access to derivative products. Financial institutions started to manufacture investment products as a combination of zero-coupon bonds or shares and derivatives. Structured equity products are "wrapped" into bond-like structures, receive security identification numbers, and are traded on regulated markets. Issuers quote bid and ask prices to make the products available for buying and selling activities. Investors pay a notional amount upfront in the form of a lump sum and get access to payoff profiles otherwise not offered in the private wealth management market. Financial institutions distribute the structured equity products through their retail advisory channels in which intermediaries give personal advice to retail clients about the attractiveness of products. The financial market crises in the year 2008 made several poor selling practices evident and revealed the existence of questionable structured equity products in the wealth management of financial institutions. The lack of strict governance rules in the issuing process of structured equity products became apparent. Financial institutions were criticized for making structured equity products artificially complex, overpricing products, betting against clients' risk positions and designing products for implementing a wealth transfer model from retail clients to financial institutions.
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