The UK structured products market is set to continue its boom and grow by 20 per cent next year, predicts Opal, the structured production administration firm.

According to the firm’s figures, in 2008 the structured product market expanded by nearly 25 per cent in the UK to almost £10 billion, up from £7.8 billion in 2007. Moreover, the industry is on track for a record 2009, Opal said, despite the issues surrounding structured products, such as criticisms that they are simply too complex for investors to comprehend.

Opal expects increased demand to come from firms seeking “very benign, FSCS-protected products” while also predicting there will be moves to create a new classification for “no risk” or guaranteed structured products. This new classification, the firm argues, will remove the taint associated with the more esoteric products.

“2009 has been a turbulent year, but despite this, many companies see the benefits that a specific type of structured product can offer. I personally welcome the closer review by the FSA as this will help to create stability in the market and, more importantly, give companies the confidence to launch what are really compelling products. Returns of above 5 per cent, capital protection and protection under the FSCS give the market a healthy future,” said Tony Collins, managing director at Opal.