Banco Santander has caused controversy in Spain by using a TV advertising campaign to sell its new Anticipación range of guaranteed funds that has been described as misleading and ‘aggressive’ by different players in the market.

Spanish finance sheet El Confidencial reported that industry participants are annoyed by the advertisements, which state, “Knowing what is going to happen will help you decide what to do,” and feature a little girl who does not want to be ‘Snow White’ because she knows that the apple is poisonous. The anonymous executives said the implication that you can know what will happen in future is misleading.

Anticipación Conservador, the conservative option, is a capital-protected growth and income product linked to the S&P Dynamic Multi-asset Strategy paying an annual coupon of 1.15%.

The products pays 50% of the rise in the underlying over the investment period as a percentage of the index's final valuation, calculated as the average of monthly observations throughout the product term.

An equity financial products expert who manages deals with the small saving banks network in Spain told StructuredRetailProducts.com, “[The advert] is very aggressive and can use that sort of initiative to sell its products, but as a customer I don’t think they are giving me all the facts. It is very difficult to foresee what is going to happen in the equity market. Even the most successful asset management teams have suffered the consequences of market volatility.”

The problem is not the product itself but the way it is being sold, said another market insider: “I don’t think they will sell a lot because of the characteristics of the product; the hook is limited. We all know by now the potential AER return of guaranteed funds. However, the advertising campaign will guarantee a lot of noise and that will be very effective. I think people in the market will complain if a volume sold is huge.”

Santander, as well as BBVA, continue to set market trends in Spain and will maximize any advertising campaign with their huge commercial networks, said the source. “They are the only ones who can afford this sort of promotion without damaging their position. They present themselves as infallible and able to beat the market. As for the rest of us, we do not have their geographical reach nor their budget, so therefore we can only sit tight and see how the retail investor reacts,” he said.

This is not the first time Santander has used large TV campaigns to sell structured products. In 2003 it sold over €1bn for its Supperseleccion range of guaranteed funds.

Santander was unable to comment as SRP went to press.

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