What is your Desire? Retail Investor Preferences in Structured Products

40 Pages Posted: 20 Mar 2020 Last revised: 24 Apr 2020

Date Written: February 19, 2020

Abstract

We conduct a choice-based conjoint analysis to evaluate the preferences of private investors with regard to the investment in structured products, especially discount certificates. Investors consider the costs and the product structure to be most important, whereas the product’s issuer and information on risk are of less interest. Their preferences depend on their (self-evaluated) expertise: while inexperienced retail investors concentrate on costs, experienced investors pay more attention to the product structure. Furthermore, buyers requesting further information on discount certificates before investing leads to an increase in the relative importance of product structure as a factor in their choice.

Keywords: Structured retail products, regulation, retail investor preferences, cost disclosures, risk presentation, choice-based conjoint analysis

JEL Classification: G11, G18, G41

Suggested Citation

Baule, Rainer and Münchhalfen, Patrick, What is your Desire? Retail Investor Preferences in Structured Products (February 19, 2020). Available at SSRN: https://ssrn.com/abstract=3544120 or http://dx.doi.org/10.2139/ssrn.3544120

Rainer Baule

University of Hagen ( email )

Universitaetsstrasse 41
Hagen, 58097
Germany

Patrick Münchhalfen (Contact Author)

University of Hagen ( email )

Hagen, 58084
Germany

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