Unstructured reflections: the Quiet Boom and how Structured Products Are Becoming a Core Allocation

In an era where volatility has gone from an outlier to the norm, RIAs are quietly rethinking their traditional allocation models — and structured products are stepping into the spotlight.

What was once seen as niche, complex, or too “institutional” is now becoming mainstream. In fact, the U.S. structured products market is projected to hit $246 billion in 2025, more than quadrupling since 2019. That kind of growth isn’t a coincidence. It’s a signal.

We’re witnessing a structural shift in how advisors think about portfolio construction. Clients are no longer satisfied with binary options—stocks for growth, bonds for safety. They want defined outcomes, downside buffers, and income that can hold up when rates are unpredictable. Structured products offer exactly that, often in ways that are far more precise than broad-market ETFs or mutual funds.

The appeal is especially strong in today’s environment: market sentiment remains shaky, rates are still a question mark, and traditional 60/40 portfolios have taken a beating in recent years. In that context, a buffered return or a defined income stream tied to equity performance isn’t just attractive—it’s strategic.

And the data backs it up. Structured products have delivered annualized returns between 5.5% and 11.6% even through volatile market cycles, according to SPi data. Income-generating notes have consistently outperformed many traditional fixed-income options, and growth products have held up surprisingly well in rocky conditions.

Importantly, the range of structures now available is broader and more transparent than ever. From Barrier Phoenix notes to Enhanced Buffered Digitals and QIS-linked instruments, RIAs have more tools to tailor strategies to client-specific goals. No longer a “black box,” these investments can be modelled, stress-tested, and compared across issuers with increasing clarity.

But perhaps the most underappreciated advantage is behavioural. Structured products help clients stay invested. Knowing there’s a buffer below or a cap above can smooth emotional decision-making in volatile times. In a business where investor behaviour often undermines investor returns, that’s a powerful edge.

It’s time for more RIAs to stop viewing structured products as a side bet and start recognizing them as a core allocation tool. Not just for high-net-worth clients or the ultra-sophisticated—but as part of a modern, diversified approach that addresses what investors care most about: income, protection, and clarity.

It may not be loud. But it’s definitely happening. A quiet boom — with big implications.

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