Structured Products in Private Banking

Bottom-up analysis
  • Understanding the yield curve
  • Basic economic concepts applied to the financial markets
  • Investment case: choosing an issuer according to desired risk exposure
  • Practical workshop
  • Analysis of the effects of crises on economic indicators
Analysis of credit spreads
  • Evaluation of default risk
  • Transition matrices
  • CDS, CLN
  • Practical workshop
  • Construction of a CLN based on a CDS
  • Study of the change in spreads during the 2007-2009 liquidity crisis

STRUCTURED PRODUCTS

Definitions, mechanisms and engineering of structured products
  • Plain vanilla and exotic options included in structured products
  • Stripping down into components
Interest rate and foreign exchange structured products
  • Non-guaranteed capital (Target redemption), guaranteed capital (Range accrual)
  • Risks attached to these products: which products for which customers?
  • Practical workshop
  • Sales pitch for a Callable Range Accrual (CRA), taking into account the volatility, interest rate and callable effects
Structured equity products
  • Guaranteed capital with index-linking
  • Sensitivity to parameters: interest rate effect, flight effect
  • Risk-taking on a decline in the underlying: reverse convertible bonds
  • Autocall: PHOENIX and EAGLE
  • Risks attached to auto call products: when to recommend them?
  • Practical workshop
  • Sales pitch for a Phoenix when taking a position on a highly volatile underlying (single stock)
Structured commodity products
  • Principle for pricing commodity derivatives
  • Explanation of forward prices in structured products
  • Digital Plus on a basket of commodities: the perfect product?
  • Practical workshop
  • Analysis of structured commodity investment products traded on the market
NAV and restructuring
  • Explain the influence of parameters on negative changes in portfolios

ROLE PLAY

Private banking role play in difficult market situations
  • Handling customer resistance
  • Developing a relationship of trust through technical knowledge and in-depth understanding of the tools available
  • Practical work
  • Structured equity product, e.g. best timing 2
  • Structured forex product e.g. digital+ (guaranteed capital) or FX target (non-guaranteed capital)
  • Bond portfolio: reduce modified duration, generate exposure to different parts of the curve
  • Change in different assets over six months, simulation of volatility variation, worst-case scenarios, restructuring when approaching barriers
Debriefing
  • Appraising skills and progress

  • Master bond management techniques as well as the construction and use of the main structured products
  • Suggest appropriate strategies to customers
  • Develop sales pitches
  • Provide solutions to customers' specific requests
  • Provide solutions to customers within a restricted investment framework (especially in the case of RFPs)
  • Optimise returns on products requested by customers
  • Negotiate with trading desks
  • Adapt returns to market conditions
  • Coverage of legal, financial and accounting issues depending on the customer's restrictions
  • Optimisation of investors' asset/liability management
  • Implementation of a financial profile that adapts to the marketing needs of the group's distribution network
  • Analysis matrices allowing advisors to understand new structures appearing on the market
  • Combination of facilitators' complementary experience: Financial markets and Private banking
  • Private bankers, family offices
  • Financial investment advisors
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