US financial services provider Sapient Global Markets is talking to the top players in the US market as it gears up for the launch of the first multi-structured product click 'n trade platform in the US.
The firm told SRP that talks are in their initial phase and that no specific time period has been set for the launch of the platform.
"There is a huge gap in the marketplace for a platform of this type and right now there are many investors who do not know what to do with their funds. For example, pension funds have payment obligations because they are not getting returns from traditional investments," said vice president of business development at Sapient Global Markets, David Donovan (pictured). "Structured products allow investors to personally customise their own risk tolerance and this platform would help give an extra level of customisation."
"The more transparent we can get this platform looking, the more chance we have of enticing investors," said Donovan. "We now need to build confidence and empower investors who want to structure their own risk tolerance."
Donovan also said that the new platform will help investors gain a new level of confidence through its intended customised use.
Kevin Samborn, vice president of valuation and analytics at Sapient, told SRP that platforms drive down the costs for product issuance and that this has advantages for both broker-dealers and investors. The planned platform will be implemented initially as an inter-dealer portal but the firm ultimately wants investors onboard.
Samborn said that there is no single regulator in the US directly supervising platforms and that legal and documentation costs will provide challenges.
"We hope to standardise the contracts and populate them through a more simple set of products. This should put the costs down," said Samborn.
Despite all the advantages around the platform, the firm is facing the challenge of opening up the multi-dealer platform to customers.
"The big dealers have their own networks and it will be difficult to get those firms to recommend this platform to their own customers," said Samborn.