Vontobel creates comprehensive cost transparency for structured products

 

As of 1 October 2014, Vontobel Financial Products will be disclosing the issuer margin and distribution fees of its own structured products, thus setting a new industry standard in terms of cost transparency.

 

Thanks to payoff diagrams that are determined in advance and set out a clearly defined repayment scenario, structured products rank among the most transparent financial instruments. In addition to this openness with regard to performance, cost transparency has also become increasingly important for investors. As of 1 October 2014, Vontobel Financial Products will therefore not only be transparently stating distribution fees – as called for by the Swiss Structured Products Association and the Swiss Bankers Association – it will also be disclosing its own expected issuer margin. Both these figures are contained in the Total Expense Ratio (TER).

 

The fee figure stated by Vontobel Financial Products in future will therefore include the Issuer Estimated Value (IEV), the Total Expense Ratio (TER) and the distribution fees stated in the TER. The TER corresponds to the difference between the issue price of the structured product and the IEV. The latter is essentially determined by the model price of the individual product components, the finance income, and the necessary hedging costs.

 

"We are convinced that disclosing costs will enable us to create further trust among investors. It will make it possible to view the potential performance of a product in the context of its costs. This is not only transparent, it is also fair, and should give investors additional guidance to help them in reaching their investment decisions," said Roger Studer, Head of Vontobel Investment Banking, commenting on the move.

 

Contact

Media Relations:	Reto Giudicetti	+41 (0)58 283 61 63
Investor Relations:	Susanne Borer	+41 (0)58 283 73 29