I've been with my financial advisor for a few years - he's been great and I've never had a reason to not trust him. A couple weeks ago he pitched the idea of moving some assets into market linked investments. He mentioned that these can be sketchy, but he has some that he feels good about - offered by strong reputable banks and with 100% principal protection. This is the first I'd ever heard of this type of investment, so I started to research...
I've been hard-pressed to find any information that describes these MLI's as a good idea. The common thread I've found is that they are over-complex in how they're structured, packed with hidden fees, and rarely a good investment. They also have a reputation for paying high commission to the broker (or advisor)
I'm going to follow up with my advisor and ask: 1) what are the full scope of risks associated with these 2) what is the complete fee structure 3) what are the expected returns - and are they capped relative to the underlying assets 4) why is the MLI preferable to investing directly in the underlying assets
As I said, I've never had reason to distrust my advisor, and I hope that doesn't change.
What would be your though process here, and what questions would you be asking your advisor had they pitched this idea to you?