Good Afternoon Email 1 of 4: Tempo unveils Tranche 15 of its product suite Once again, we are splitting details of Tempo’s latest product suite launch into separate emails, because once again the new products from Tempo, unveiled today, deserve special attention. However, before we tell you more about the Tempo plans, we’re pleased to provide a fabulous general input regarding structured products, which we think many investors (including those who may not have invested in structured products yet) will find interesting and thought provoking … ‘SPs: Need; Evidence; & USPs’ Chris Taylor, Global Head at Tempo, recently presented a video webinar for the Personal Finance Society (known as the ‘PFS’, the nationwide professional body for financial advisers in the UK, which is part of the Chartered Insurance Institute (‘CII’)). The intended audience for the presentation is professional advisers, however there is a link to a recording of the presentation which is available via a portal called BrightTALK. The presentation, which runs for an hour (plus some questions from advisers which Chris answered) opens with an overview of the economic and markets backdrop and outlook, including thinking about what the global bond market is signaling, pre and post Covid, before discussing adviser and investor thought processes for what everybody now universally expects to be a more challenging (and potentially low) returns environment ahead. Chris then runs through some general portfolio construction considerations, including thinking about what might be expected in terms of ‘alpha’ from active fund management and ‘beta’ from passive fund management, before positioning the virtues and merits of structured products, offering ‘alpha by contract’, in a potentially low (or even worse!) returns environment. The presentation: 1) Establishes that there is a clear NEED for advisers and investors to consider structured products; 2) Presents the comprehensive and irrefutable EVIDENCE that structured products work, and have been working for a long time; 3) Highlights the significant USPs of structured products, particularly at this time; and 4) Introduces Tempo and some of the things which Tempo is doing differently to raise the industry’s bar and ‘redefine structured products’ for professional advisers and their clients. The following link should allow you to access the BrightTALK video / audio recording of the presentation (you may need to register to access the site): https://www.brighttalk.com/webcast/17182/422572 We think it’s one of the best presentations we’ve seen, in terms of sensibly and persuasively making the case for structured products. It rationally explains and details why advisers and investors should be carefully considering the current economic and stock market backdrop and outlook and their portfolio options, and recognising the facts which evidence the virtues and merits of structured products and the proven efficacy of including structured products in portfolio. If you can find a quiet hour to view and listen to the presentation, we think you will find it interesting and worthwhile. We have also summarised some of the main points which Chris covered, regarding adviser / investor thought processes for a more challenging (and potentially low) returns environment, below this email. Pass it on … more investors need to recognise the benefits of structured products If you find the presentation of interest, and think that other investors might too, perhaps you could pass it on to anyone you know who might also find it interesting. We are keen to help strengthen investor understanding of structured products, and to focus on important aspects of ‘getting structured products right’, including thinking carefully and thinking ahead about stock markets and portfolio construction considerations, etc. Details for each of the Tempo plans will follow … Three separate emails will follow, providing details for each of the Tempo plans. As always, please see the full plan literature for full details of these plans and the features, terms and conditions, including the risks. Please note that the promotion of the plans does not constitute ‘advice’ to invest. Advice is always specific to an individual investor’s circumstances and needs, following the process of ‘know your customer’, with the aim of ensuring that any product is suitable for an investor. Tempo’s products can only be accessed with advice. Demand for Tempo’s plans has been very high recently, resulting in some of our clients missing out on the initial terms on offer, despite moving quickly! If you are interested to invest in any of the Tempo plans in Tranche 15 we would certainly suggest early contact, in order to try to ensure availability and access. Please contact us to discuss any aspect of these products. Best Regards. Best Price FS Team Tempo PFS presentation: ‘SPs: Need; Evidence; & USPs’ The following is a brief summary of some of the points covered: > Clearly, there are various reasons why it seems sensible for professional advisers and investors to consider the possibility that it may be far harder to achieve such strong portfolio returns in the decade ahead of us as were achieved in the decade now behind us. > It’s important to remember that the economic / markets news and outlook wasn’t too bright before Covid-19 … and it’s difficult to conclude that the outlook now is anything other than markedly more challenging than it already was. > The global bond market (which includes a swathe of long term, negative yielding debt around the world) is signaling an ‘everything lower and slower for (much) longer’ environment. > A low (or worse than low!) returns environment could present significant portfolio construction challenges for professional advisers and investors … particularly if portfolio diversification is limited to just active and passive fund management, and asset class and geography. > Optimal portfolio diversification needs to include consideration of different types of investment, which can do different things, in different ways, at different times. This is what diversification is all about: cue including structured products in portfolios! > Many investors are currently overweight exposure to market risk, including the‘upside risk’ that markets don’t rise to the level wanted and needed in order to generate the level of returns wanted and needed, in the decade ahead of us, as well as the downside risk of losing capital. Structured products can exchange market risk, including the process risk of active fund management, for credit / counterparty risk and the potential benefits of ‘investing by contract’ … at a time when the primary concern for many professional advisers / investors, at this point, is market risk, not credit / counterparty risk. > Professional adviser and investor understanding and consideration of the USPs of structured products could prove to be eminently timely. Structured products can do things which neither active nor passive fund management can do, including being designed to generate positive returns without requiring markets to rise, with a defined deep level of protection if they should fall … and they do it all by contract: offering ‘alpha by contract’, as an alternative and / or complement to alpha by active fund management and / or beta by passive fund management. > ‘Time in the markets, not timing markets’ is one of the most important learning points for investors, borne out by studies of past crises. The numbers which are cited in the presentation as an example of this were:
> There is clear, long term, irrefutable evidence of the virtues and merits of UK retail structured products and of the efficacy of including structured products in investor portfolios. > British economist John Maynard Keynes is attributed with saying, ‘When the facts change, I change my views … what do you do?’. We hope that the facts regarding the performance and risk / return profiles of UK retail structured products over the last decade provide persuasive / compelling evidence that structured products work and can add value in client portfolios. We will be providing further information regarding this, using the latest available industry data. |
