Shepherd, Smith, Edwards & Kantas: Unsuitable Broker Recommendations of Structured Notes, Including Callable Yield Notes and Autocallable Securities is Causing Investors’ Losses During COVID-19
Retrieved on:
Monday, April 27, 2020
Structured Notes are complex investments that are high risk and not for the average investor.
Key Points:
- Structured Notes are complex investments that are high risk and not for the average investor.
- While brokerage firms typically issue these Notes, these investments are not for investors who are risk-averse, including most retirees or senior investors, nor are they suitable for other unsophisticated retail investors.
- The majority of these notes pay a coupon or interest rate according to set parameters with the payment defined upon maturity.
- Aside from auto-callable securities and callable yield notes, other types of structured notes include market linked notes, trigger performance securities, return optimization notes, E-TRACs, strategic return notes, return optimization notes, capped leveraged return notes, Equity Linked Securities (ELKs), Performance Leveraged Upside Securities (PLUS), and target term securities.