In that period, alternative UCITS’ assets under management grew from €20 billion ($25.9 billion) to €85 billion, while structured retail products had outstanding amounts totalling €770 billion at the end of 2012.

The research found that while their sale to retail financial consumers has increased, there is evidence to show that both products have produced weak returns on average, with 3 per cent for alternative UCITS and 2.5 per cent for structured products.

A sample analysis of 76 structured products sold to retail investors also found that structured products are sold, on average, with a significant issuance premium - estimated at around 4.6 per cent of the issue price and up to 5.5 per cent when the credit risk of the issuer is included.

In response to the findings, ESMA is working on a policy that will improve investor protection by promoting better information disclosure at the point of sale. The regulatory measure will include divesting information about the total costs of investing in complex products, as well as the specific risks attached to each product.

The move is the latest piece of regulation issued by ESMA, which was established as a regulatory EU authority on 1 January 2011 to enhance the protection of investors and promote stable financial markets in the EU. Since then, ESMA has implemented several measures alongside the European Supervisory Authorities responsible for banking (EBA) and the European Systemic Risk Board (ESRB).