Structured investments are financial products that provide returns linked to the performance of underlying assets but may offer some degree of downside protection. They can be used by investors both before and after retirement to provide market-linked returns or guaranteed income. Close to retirement, products with capital protection can ensure returns while protecting savings. In retirement, structured products can provide enhanced stable income through quarterly paying notes. Overall, structured products provide alternatives to traditional investments and annuities that balance growth, income and risk management over the long term.

1. What are structured investments, how they
can work for investors before and after
retirement?
Andrew Savill – Director, GFS
January 2013
Professional Advisor use ONLY – Not for distribution to Retail Clients.
Gilliat Financial Solutions is a trading name of Arbuthnot Latham & Co., Limited who are authorised and regulated by the Financial Services Authority No. 143336.

2. What are structured products?
• In simplest form a structured product is like a
loan to a financial institution, usually a bank
• For the ‘loan’ the bank will promise to pay a rate
of interest or ‘return’
• This return is often transformed from a
traditional stream of interest into a market linked
return
• For structured products that feature full
protection to capital, the bank will promise to
repay this too
• For non capital protected products there are
market linked conditions that govern the amount
of capital repayment

3. A Mutual Fund
Investor Invests Fund Great if
money with Manager benchmark is
a Fund will beaten but poor
Manager Attempt to performance is
‘beat the ‘outsourced’
benchmark’ back to the
investor

4. A Structured Product
Behind the scenes a
Investor Invests Unless the trader manages the
money in a Bank collapses Bank’s liabilities. If the
trader does a good job
structured the returns will there may be a profit for
product be delivered the bank but if the trader
EXACTLY as performs poorly this
performance IS NOT
advertised outsourced back to the
investor.

5. A simple Example Product
• Israeli Shekels
• Goldman Sachs 5 year Note
• i.e. Investor ‘lends’ funds to Goldman Sachs
• Interest Rate is defined by the performance of the Tel
Aviv 25 Index
• i.e. instead of [say] 3% p.a. the investor gets a rate
equivalent to any rise in the Index over the 5 year
term. No interest if the index falls.
• Capital fully protected
• i.e. if the Index falls there is no loss of capital
02/06/13 Gilliat Financial Solutions is a trading name of Arbuthnot Latham & Co., Limited who are authorised and regulated by the Financial Services Authority No. 143336. 5

6. Why are Structured Products Useful?
 Full spectrum of defined risk
characteristics
 Enable ‘infinite’ return profiles to
accommodate any economic or market
scenario
 Provide access to a broad range of
asset classes including those where
direct holdings are impractical
 Tax Planning
3

7. Structured Products in retirement planning
(1) Accumulation Phase
02/06/13 Gilliat Financial Solutions is a trading name of Arbuthnot Latham & Co., Limited who are authorised and regulated by the Financial Services Authority No. 143336. 7

8. Accumulation Phase
 In the early stages focus is on strong
investment growth
 Traditionally a higher weighting to equity
in pension portfolios
 Actuarial Expectation of 7% p.a. growth
in equities
 But certainty of consistent equity growth
is more remote than it used to be
3

9. Accumulation Phase
Structured Product Alternative?
• ‘Annual Kick-Out’
• RBS
• Term 6 Yrs (max)
• Linked FTSE100 and S&P500
• 50% protection against market
falls
• Headline Rate (p.a.) :
• 9% (90% reference level).
• Early maturity from year 2

10. Annual Kick Out: How it works……
Initial Level of the FTSE 100 & S&P 500 taken on the Start Date
Yr 2 Anniversary: Is the closing level of both
the FTSE 100 and the S&P 500 the same or Yes 18% Return PLUS repayment of capital
higher than 90% of their Initial Levels?
NO
Yr 3 Anniversary: Is the closing level of both
the FTSE 100 and the S&P 500 the same or Yes 27% Return PLUS repayment of capital
higher than 90% of their Initial Levels?
NO
Yr 4 Anniversary: Is the closing level of both
the FTSE 100 and the S&P 500 the same or Yes 36% Return PLUS repayment of capital
higher than 90% of their Initial Levels?
NO
Yr 5 Anniversary: Is the closing level of both
the FTSE 100 and the S&P 500 the same or Yes 45% Return PLUS repayment of capital
higher than 90% of their Initial Levels?
NO Maturity: Is the closing level of both the FTSE
100 and the S&P 500 the same or higher thanYes 54% Return PLUS repayment of capital
90% of their Initial Levels?
NO Was one of the Capital is reduced 1% for every 1% fall in the lowest
Indices ever over Yes of the FTSE 100 and S&P 500 at maturity
50% down?
NO Capital repaid to
Investor in FULL

11. Pros and Cons
Pros
• Above benchmark returns
• Significant protection to
market falls
• 9% p.a. growth even if markets
fall by up to 10%
• Potential early maturity
Cons
• Credit exposure to RBS
• If markets perform strongly
then this will not keep up

12. Further Assessment
• Structured products operate on a defined set of rules
• The robustness of the product can be tested historically
02/06/13 Gilliat Financial Solutions is a trading name of Arbuthnot Latham & Co., Limited who are authorised and regulated by the Financial Services Authority No. 143336. 12

13. Backtesting – IN THE BROCHURE…….

14. The Gilliat Growth Multiplier – October 2011
Summary Product features
• 6yr Term
• Linked to the FTSE100 Index
Client Returns
• 800% of the Rise in the FTSE100 up to a max return of 80%
Client Risk
• If FTSE halves during Term and fails to recover then at
Maturity loss of capital on a 1 for 1 basis.
i.e. if FTSE started at 6000 and ends at 4500 having halved
during the Term capital repayment would be 4500/6000 =
75%
• RBS continued solvency
Performance to Date
• FTSE100 starting level was 5226 – currently 6200 >> up 18%
>> product would return 80% if it matured today

15. Performance Analysis
02/06/13 Gilliat Financial Solutions is a trading name of Arbuthnot Latham & Co., Limited who are authorised and regulated by the Financial Services Authority No. 143336. 15

16. Performance Analysis
Outperformance
Underperformance
Outperformance
02/06/13 Gilliat Financial Solutions is a trading name of Arbuthnot Latham & Co., Limited who are authorised and regulated by the Financial Services Authority No. 143336. 16

17. Structured Products in retirement planning
(2) Approaching Retirement
02/06/13 Gilliat Financial Solutions is a trading name of Arbuthnot Latham & Co., Limited who are authorised and regulated by the Financial Services Authority No. 143336. 17

18. Close to Retirement - Market linked returns
with capital protection
• Israeli Shekels
• Goldman Sachs 5 year Note
• i.e. Investor ‘lends’ funds to Goldman Sachs
• Interest Rate is defined by the performance of the Tel
Aviv 25 Index
• i.e. instead of [say] 3% p.a. the investor gets a rate
equivalent to any rise in the Index over the 5 year
term. No interest if the index falls.
• Capital fully protected
• i.e. if the Index falls there is no loss of capital
02/06/13 Gilliat Financial Solutions is a trading name of Arbuthnot Latham & Co., Limited who are authorised and regulated by the Financial Services Authority No. 143336. 18

19. Market Linked Returns with Capital
Protection
• Other products…..
• Inflation linking - indexing a proportion of the pension
in the last few years before retirement.
• Protected portfolio - multiple asset classes, capped
returns but still linked into the equity, commodity
bond markets. Capital protected.
• All are possible using structured products.
02/06/13 Gilliat Financial Solutions is a trading name of Arbuthnot Latham & Co., Limited who are authorised and regulated by the Financial Services Authority No. 143336. 19

20. • Structured Products in retirement planning
(3) Retired

21. Retired
• Retirees are income seeking with a desire for capital
protection for the next generation to inherit
• Annuity rates have really suffered, income also paid out of
capital
• In addition to a traditional annuity how can savings be ‘put to
work’?
• There are alternatives to supplement poor income & annuity
rates that can be used for regular investment

22. Enhanced Income Builder (Feb 2013)
Enhanced Income Builder (Feb 13)
•Commerzbank backed
•Quarterly Income Note
•Income (re)paid if FTSE100 is
above 3500 points
•8.20% p.a.
•6yr 1wk term
•5% Comms

23. Enhanced Income Builder (Feb 2013)

24. 3500 FTSE100 Level
8 days
02/06/13 Gilliat Financial Solutions is a trading name of Arbuthnot Latham & Co., Limited who are authorised and regulated by the Financial Services Authority No. 143336. 24

25. Fixed Rate Bonds in the UK – Current offers…
A scan of the UK Market – w/c 21st January
2013 - best rates from the ‘big 5’ UK banks
•Barclays Bank – 2.15% for 18 months
•RBS – 2.1% for 2 years
•HSBC – 3% for 5 years (£100k +)
•Santander – 2.5% for 18 months
•Lloyds TSB – 2.25% for 3 years
In 2007 rates of 6% + were available
Source: Bank Websites 21 January 2013

26. Summary / Q&A
Gilliat Financial Solutions has
become the leading independent
provider of structured products in
the UK and now internationally by:
• working with our clients, for
their clients
• providing access to a broad
range of Issuing Banks
• delivering value and
innovation, time and time
again
Any last questions?
02/06/13 Gilliat Financial Solutions is a trading name of Arbuthnot Latham & Co., Limited who are authorised and regulated by the Financial Services Authority No. 143336. 26

27. Contact Information
Andrew Savill Toby Stagg
Business Development Director Broker Consultant
Gilliat Financial Solutions Gilliat Financial Solutions
Arbuthnot House Arbuthnot House
20 Ropemaker Street 20 Ropemaker Street
London EC2Y 9AR London EC2Y 9AR
Office: +44(0)20 7012 2803 Office: +44(0)20 7012 2807
Mobile: +44(0)7785 470 030 Email: tobystagg@gilliat.co.uk
Email: andrewsavill@gilliat.co.uk

28. Important Notes
This material is for professional financial advisers only and persons of any other description should
not rely or act upon it. Any investment in Gilliat Financial Solutions products should be made only
after the investor has read and understood the product Guide including the Terms & Conditions,
and the Termsheet.
Issued by: Gilliat Financial Solutions a trading name of Arbuthnot Latham & Co., Limited.
Arbuthnot Latham & Co., Limited is registered in England No. 819519. Registered office:
Arbuthnot House, 20 Ropemaker Street, London EC2Y 9AR.
Gilliat Financial Solutions a trading name of Arbuthnot Latham & Co., Limited. who are authorised
and regulated by the Financial Services Authority, 25 North Colonnade, Canary Wharf,
London E14 5HS. Registered under the Financial Services Authority number 143336.
Gilliat Financial Solutions does not offer investment advice or make any recommendation
regarding investments.
Returns from the structured products are at risk in the event of any of the institutions who
provide securities for these products default on their financial obligations.
02/06/13 Gilliat Financial Solutions is a trading name of Arbuthnot Latham & Co., Limited who are authorised and regulated by the Financial Services Authority No. 143336. 28