Index CDS

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Jan 20, 2010 5:46 pm

Question for the RIA,


What do you charge for putting clients in to index CD, Do you charge AUM,
If yes how do you explain to client your value, They can go to the bank and the bank broker will be happy to sell them CD without fees, He makes commision on sale,
Is there such a thing as a no load index CD?
Jan 21, 2010 1:29 pm

No responses?

no one doed index CD?
Jan 24, 2010 9:27 am

% of RIAs that do structured products=very very low

Jan 24, 2010 2:42 pm

Why?

Jan 24, 2010 2:51 pm

more sophisticated investors rather than just savers. A fiduciary duty generally precludes commision accts. Equity-linked products are really a zero coupon bond plus some derivative; they need 27 pages to explain all the whys and wherefores of the rules. RIAs generally do managed accounts of well-thought-out risk management. Indexed CDS appear to be a bit of a gimmick that makes a lot of money for the investment bank behind it since they write all the rules. Maybe I am wrong- but I see it at as a way to get the CD buyer (saver) to actually have to pay a commission for once. 

Jan 24, 2010 9:55 pm

It is basically the same idea as EIA,

For the guaranteed part of the portfolio,
Instead of client keeping his money in a plain vannilla CD, Where he is limited to 2-3 % put him in index where at least he gets some upside.
Jan 25, 2010 8:12 am

Why not just use an EIA?

Jan 25, 2010 9:07 am

FDIC

Jan 25, 2010 10:56 am

Are you saying FDIC is stronger/better run than a highly-rated insurance company?

Jan 25, 2010 11:01 am

I am answering the question "what is the difference". Also, many people DEMAND FDIC and annuities therefore do not appea to them. So the enterprising investment banks came up with this very profitable way to make CD buyers finally pay someone a commission!

Jan 25, 2010 2:40 pm

Annuities are for retirement,


Some people want there money to be available before they turn 591/2