Structured Products as a Tool for Managing Financial Assets of Individuals in the Private Banking Industry

Student: Kurazheva Margarita

Supervisor: Valentina V. Sofronova

Educational Programme: Economics (Bachelor)

Year of Graduation: 2019

Growth of investment in structured products is one of the most relevant trends in the development of the Russian private banking sector nowadays. The main feature of this product is a possibility of increasing profitability under the guarantee of capital protection. This quality meets the interests of risk-inclined VIP customers. According to experts’ reviews, over the past two years, the absolute figures of investments in structured investment products increased by almost 25%, reaching 229 billion rubles by 2019. The purpose of this work is to study the development of the market for structural products as instruments for managing financial assets of individuals in the field of Private banking and Wealth management in Russia. Throughout the study some methods of statistical, comparative and econometric analysis, as well as calculation methods for the formation of the investment portfolio and options has been used. The structure of the work includes 3 chapters, introduction, conclusion, list of references and appendices. Chapter 1 is devoted to the disclosure of the theoretical foundations of alternative investment categories and structured investment assets. The methodological foundations of the concept of Wealth management are described, the role of the elite banking system Private banking is revealed. Chapter 2 examines the current state of the Private banking and Wealth management sector: it identifies the main factors and development trends, describes the regulatory framework, presents a comprehensive analysis of operations, and builds an econometric model of sustainability. Chapter 3 explores the use of structured investment products: analyzes examples of real products that are in the line of proposals of JSC Citibank and PJSC Sberbank, disclose capital protection tools and profit generation mechanisms, developed and tested a model product structure that meets the needs of a hypothetical client. The paper draws conclusions about the benefits and risks of using structured products.

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