Drawbacks and solutions

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Drawbacks and Solutions

The diversity of the structured products is both a blessing and a curse. The benefits which an investor can achieve with structured products also include certain drawbacks. CAT Financial Products has taken on these disadvantages and developed solutions wherever possible.

  • Transparency - certain investors and primarily the press criticise the lack of transparencyz

We work with 100% transparency – from the cost structure to the secondary market. We also provide estimates of the product's issue costs.

  • Liquidity –- the problem: there is only one market maker

The price of a product originates and develops in the book of the issuer's dealer; it can only be negotiated there. We support our clients in the secondary market with our own book and a wide client base. In this way, we have always found an appropriate solution for problems caused by inflexible and non-service-oriented issuers.

  • Complexity - from complicated structures and lack of clarity

It is true that the diversity of structured products can result in complex structures. The design of the market offerings with more than 30 issuers, hundreds of various product types and an almost unlimited number of underlying assets makes it difficult to see the big picture. We are not pressured to sell any special structures or innovations. We try to concentrate on the straightforward and sensible structures. We only offer more complex structures or constructs when they are desired and meaningful. Only one independent supplier, who covers the complete range of offerings, can see the big picture and provide this know-how to the clients – this does not involve complexity but rather the time factor.

  • Secondary market -– a complex interplay of options

The behaviour of structured products on the secondary market depends on many factors. The interplay of various investments and options within a product makes it difficult to understand changes. An independent supplier and partner can neutrally explain the behaviour of the secondary market and point out the risks. An independent supplier with access to the total market can offer all structures. The secondary market predictions provided by the issuer can thus be reviewed independently and compared to others. We also record the development of the certificates and the price-related factors in performance reports which are updated daily. These are password-protected and provided to our clients for every product.

 

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CAT Financial Products AG

Zürich: Limmatquai 4, CH-8001 Zürich
Bern: Kirchstrasse 52, CH-3097 Liebefeld bei Bern


+41 43 311 27 40 | info@catfp.ch

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