For example, there was a story about a lady in her 60's who went into a DBS branch to renew her fixed deposit, but she was convinced to instead purchase into this product even though her english is not very good. If this story is true, I would think this is something worth investigating in terms of the selling practises involved as these types of products would seem unsuitable for that type of client. I'd think that she wouldn't have understood fully how the product works (actually I wouldn't be at all suprised that the bank officers who are selling these products themselves don't understand how the products work).
These structured products can be fairly complex products and some of them are basically designed to gamble on the price movements of different securities (stocks, bonds, currencies etc). One example of a structured product is one designed around credit linked notes - even though they may have bonds in their name - your money isn't used to purchase bonds, but your money is used as insurance for the bond holders in case the bond issuers default on payment in return for the premium that is payed by the bond holder for the insurance (after all the commissions taken out by the ones designing the product and arranging the deal (eg. an investment bank) and the marketers and sellers of the products (eg your local retail bank) of course).
You'd think that a 60 year old woman wanting to renew her fixed deposit would not want to be an insurer for a bond holder for a measly 5% return when there is a risk that she'd lose the whole amount (and not just some of it). Sure the risk was considered small (even the experts didn't know that Lehman would go under 12 months ago), but the risk was still there.
Something to learn from all this is that for people to remember - don't invest into something that you don't understand !
