Skip to content

ETFs Review Our ETFs

Start an ETF

1042 QRP

About Firm

Team

Research Blog

“Best Of” Blog

Academic Research

Books

New? Start Here

Search

Buying Complex Retail Investment Products May Not be a Great Idea

Complexity is often presented as a natural consequence of financial innovation. Markets evolve, products become more sophisticated, and investors gain access to increasingly customized risk-return profiles. But complexity can also serve another purpose; it can make products harder to compare. When investors cannot easily compare alternatives, competition may become less effective at pushing prices down. This paper introduces a more strategic interpretation of financial complexity. Issuers may deliberately redesign investment products when competitive pressure increases, shifting toward structures that are harder for investors to evaluate and compare.The result is a subtle but important mechanism. More competition does not necessarily produce better outcomes for investors.…