Complex Products & Alternative Investments


Exchange Traded Products (ETPs)


Complex products are a type of investment whose value can fluctuate in a manner that is difficult to understand relative to traditional investments. Complex investments typically invest in nontraditional assets or engage in one or more complex strategies. Many complex products are not actively traded, making them difficult to value. Often, they are extremely illiquid and are not eligible to be traded in a secondary market such as on an exchange or in the over-the- counter market. Examples of complex products include but are not limited to structured notes, inverse or leveraged ETPs, securitized products, asset-backed securities, products with a complicated derivative component, products with contingencies in gains or losses, investments tied to the performance of markets (such as the volatility index), products with principal protection, products with complicated limits or formulas, and more. You should review the characteristics of any complex products with your financial advisor prior to investing. For certain complex products, we require our financial advisors provide you written information prior to or at the time of sale or via mail upon completion of the sale to ensure you are aware of the characteristics and risks of the investment you are purchasing.

Fees and Costs

The fees and costs associated with different types of complex products will vary between products. In addition to understanding the characteristics of these products, it is also important to discuss the fees and costs associated with the products prior to investing. Please discuss these products with your financial advisor for additional detail on the particular fees and costs associated with a complex product.

More Information

As stated above, investing in complex products involves risks that you should carefully consider prior to investing. Your financial advisor can explain the risks, characteristics and costs to associated with these products should you wish to learn more. Additionally, FINRA has information for investors on its Alternative and Complex Products Resource Page.