How advisors can use institutional strategies for the retail channel

Each month at Wealth Professional we focus on a topic we believe to be especially relevant to advisors now. This June we're focusing on structured products. 

Leaving aside the boundary set between institutional and retail clients, there are fundamental goals that each set are looking to achieve. That is especially true of defined contribution (DC) pension plans, which are trying to help clients manage a deeply complex set of scenarios around retirement and decumulation. Much like a retail investor and their advisor, these plans use a particular set of strategies to ensure that their members can retire with confidence even as life expectancies continue to grow. Solutions designed for the DC institutional channel may, now, have greater application for retail investors struggling with retirement challenges of their own.

Anne Meloche, Head of Institutional Business for Sun Life Global Investments, sees an institutional market increasingly focused on managing and communicating the sophistication and complexity required to succeed in today’s investment environment. As the sophistication and complexity grow, there is a need for outcomes to be communicated as simply as possible. It’s a need that’s being mirrored in the retail channel as well.

“Simple isn’t about reducing sophistication,” Meloche says. “Throughout 2024 and a big part of 2025, I met with clients. plan sponsors, prospects of ours, advisors, large consulting firms. I wanted to better understand needs and preferences. I was feeling things were evolving. And consistently in all these meetings I’ve heard clients or consultant and advisors say clients are looking for quality portfolios that deliver strong risk-adjusted returns.”

Applying institutional outcomes to retail

The outcome, Meloche says, is the lifetime financial security of plan members. Simplicity in communication is meant to help achieve that outcome by freeing plan sponsors to focus on planning for members and individual outcomes. As solutions become more complex, it can be more challenging for plan members to fully grasp how they work. That struggle in understanding can distract from a more important focus on outcomes. By simplifying how strategies like target date funds are understood, there’s more time and mental capacity to focus on planning for decumulation and ensuring retirees don’t outlive their savings.

Sal Ammirato, Vice-President, Head of Retail Distribution & Channel Strategy, Sun Life Global Investments, is seeing a growing appetite for these kind of structured plans and solutions on the retail market today. He emphasized how the different forms of risk innate in modern asset management have shifted what advisors and their clients want from larger asset managers.

“One of the biggest challenges facing retirees today is balancing longevity risk, market risk, and inflation risk. Institutional investors have long used outcome-oriented solutions to manage similar challenges, and many of those concepts translate well to individual investors,” Ammirato says. “Structured products can help provide a more defined investment experience by offering varying levels of downside protection while maintaining some participation in market growth. For retirees, this can create greater confidence in remaining invested and reduce the emotional impact of market volatility during the decumulation phase.”

Controlling for behavioural risk

Structured products, Ammirato says, are becoming more common among retail advisors and their clients as a portfolio construction tool. Behavioural outcome and behavioural investing matter so much to retail advisors, and Ammirato believes structured products can help with that. Just as Meloche applies these straightforward, outcome-based wrappers to a DC plan member audience, Ammirato argues that retail investors can rely on structured products for stability and reassurance amid market volatility.

For all the ways individual underlying goals and concerns can converge, retail and institutional clients still have key differences. Ammirato notes that institutions are using structured products to manage risk, targeting their specific exposures, liabilities, or portfolio outcomes. On the retail side, he says, client-specific goals drive the bus. Capital preservation, income generation, behavioural coaching, and volatility management all factor more directly into the decisions advisors make. Nevertheless, the need for clear, communicable outcomes has prompted a growing interest in structured products among advisors. The industry, he says, is applying that same focus on outcomes that works on the institutional side to a retail audience.

“The most effective conversations focus on outcomes rather than product mechanics. Clients don’t typically wake up asking for a structured product. They want confidence in retirement, protection from major market downturns, reliable income, and peace of mind. Advisors should begin with those goals and then explain how a particular solution may help address them,” Ammirato says. “I often encourage advisors to frame the discussion around three questions: What problem are we trying to solve? What role does this solution play within the overall portfolio? What trade-offs are we accepting in exchange for the benefits it provides? When clients understand the purpose of a solution and how it supports their broader financial plan, the conversation becomes much more meaningful than discussing features or technical details alone. Ultimately, structured products should be viewed as one of many tools available to advisors as they build diversified portfolios designed to help clients achieve their long-term goals.”