As a leading platform for the delivery of financial solutions and alternative investment products to the wealth management community, CAIS is consistently looking to expand the range of products it can bring to the table. One recent area of focus has been on structured products. Goldman Sachs has been offering structured products through CAIS since February 2013, but now CAIS’s roster of top-rated banks using its open-architecture structured notes platform also includes JP Morgan, Morgan Stanley, RBS, and BNP Paribas. In a recent statement announcing the addition of the new firms, CAIS said the move has provided it with a “diversified, multi-issuer menu of structured solutions” that it can offer to its clients.
Range of Solutions
In addition to structured notes, CAIS’s platform also offers investors access to hedge funds, private-equity funds, ’40 Act mutual funds, equity and debt syndicates, and precious metals; but the new “open-architecture” structured notes are a key differentiator, according to CEO Matthew Brown. “With the addition of the open architecture structured notes solution, we are improving pricing and execution efficiency as well as overall product education for advisors,” he said. Brown also said that having multiple providers on the same platform represents “competitive advantage” for the firm, since it should result in more competitive pricing for customers.
The purpose of the structured-notes platform is to allow wealth advisors to create customized notes. Larry Wilson, Head of Structured Investments Distributor Marketing at JP Morgan, said that joining CAIS will allow his firm to offer such notes “to a broad and growing network of advisors who understand structured products and the benefits to deploying them in their clients’ portfolios.”
What are structured notes? CEO Matthew Brown explains in a separate press release that there are two types: One is when a bank creates and markets the structured note in an “off-the-shelf” format; the other is when an advisor comes up with an idea and needs someone to create it for him or her. This is where CAIS comes in: “CAIS adds value because we take the advisor’s request for the intended note and can have all of the different banks bid on filling that order, and the best price wins,” Brown said.
Terms on structured notes typically range from 18 to 72 months, and the principal on the notes is only protected if the note is held until maturity. Educational material on these products is available for advisors as part of CAIS’s expanded structured products menu.