Many FA and IFA firms could only sell unit trusts. For low risk, they usually can only sell single or regular premium endowment. For clients who want more choices they usually go to their private bank. I remembered for the past couple of years, I was rather frustrated with these.

I recalled that myself and other colleagues who were often dismay that we “lost” clients to the private bank as clients were attracted to seemingly low risk/high return products specifically structured notes. But that changed when there were many product providers who approached us to distribute their products. Suddenly structured notes and exotics become available. However, I have never sold a single structured notes and such exotics because I will only sell what I can comprehend. Actually I end up doing quite a lot of ETFs (I believe I might be the weird adviser doing this kind of thing).

In retrospect, it was good that many exotic products cannot be distributed through the FA channels. So far I only heard of a few FA firms which got itself in trouble with the Lehman Brothers MiniBomb fiasco. But in the future will this be so? Perhaps simplicity is always the best.

In the meantime, when the market recovers, history will repeat itself again. Advisers will sell the highest commission yielding products and clients will be attracted to exotics rather then plain boring stuff. When people lose all their money when market collapse, history will repeat itself again where clients protest at Hong Lim and institutions just sack their RMs. What is new under the sun?