Charles Replogle wanted a safe investment for his 86-year-old mother and his mentally disabled brother. So when a broker — a friend he'd known since he was 9 — suggested a low-risk, high-yield investment called a principal-protected note, the 55-year-old Vero Beach, Florida, restaurant owner handed over $130,000 — about a third of his savings. It sounded like a no-brainer.
Structured products are touted as safe, but they're really time bombs waiting to go off. — Dan Page
Huge mistake. The investment Replogle bought from UBS Financial Services, a division of the Swiss bank UBS AG, was much riskier than he knew. Although described as safe, it was in fact a complex, iffy offering known as a structured product — an investment whose yield depends on the performance of underlying financial instruments such as stocks, stock indexes, and unsecured bonds.
How Safe Are Your Savings? - AARP The Magazine
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