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What is your desire? Retail investor preferences in structured products

Rainer Baule (Chair of Banking and Finance, Faculty of Economic Science, FernUniversität in Hagen, Hagen, Germany)
Patrick Muenchhalfen (Chair of Banking and Finance, Faculty of Economic Science, FernUniversität in Hagen, Hagen, Germany)

Review of Behavioral Finance

ISSN: 1940-5979

Article publication date: 8 March 2021

Issue publication date: 4 April 2022




The authors evaluate the preferences of retail investors with regard to the investment in structured financial products. The purpose of the paper is an analysis of the relative importance of key product attributes namely the issuing bank, the product structure, the associated costs and the disclosed risk.


The authors conduct a choice-based conjoint analysis, based on an online experiment. Participants judge their preferences for products which are presented by shortened key information documents according to the requirements of EU regulation.


Investors consider the costs and the product structure to be most important, whereas the issuer and information on risk are of less interest. Their preferences depend on their (self-evaluated) expertise: while inexperienced retail investors concentrate on costs, experienced investors pay more attention to the product structure.

Research limitations/implications

The study is limited to a subsegment of the market, the discount certificates. For these products, issuing banks gain insight into the attractiveness of their products. Furthermore, the study carries implications for regulators: since investors emphasize the costs in their decisions, an unbiased disclosure of costs should be enforced.


While the recent literature has studied preferences for the investment in mutual funds, this is the first paper which directly analyzes the drivers of an investment in structured retail products.



Financial support from the Competence Centre “Consumer Research NRW”, a cooperation of the Consumer Centre of North Rhine-Westphalia with the Ministry for Environment, Agriculture, Conservation and Consumer Protection and the Ministry for Culture and Science of the State of North Rhine-Westphalia, is gratefully acknowledged. The authors furthermore thank Martin Wagener and Jessica Hummel from Börse Stuttgart for their support concerning the online survey and Nik Samoylov from for technical support. Finally, the authors thank an anonymous referee for valuable comments on the paper.


Baule, R. and Muenchhalfen, P. (2022), "What is your desire? Retail investor preferences in structured products", Review of Behavioral Finance, Vol. 14 No. 2, pp. 197-222.



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