Why Brian Rezny Hates Structured Products: Lessons from History, Costs, and the Stifel Scandal
- Rezny Wealth Management
- 2 days ago
- 4 min read
As president of Rezny Wealth Management, a fee-only fiduciary firm in Fort Myers, FL, Brian Rezny has long criticized structured products and the product-pushing model of non-fiduciary advisors, emphasizing that true advice means avoiding sales-driven conflicts to deliver adaptive, risk-controlled strategies. His firm charges flat fees and puts clients first—no commissions from tricky investments. Structured products, like notes tied to stocks or indexes, epitomize industry flaws with their conflicts, high costs, and risks that harm everyday investors. Rezny steers clear because they clash with fiduciary duty, as seen in his discussions on distinguishing real advice from product sales. The recent Stifel case with broker Chuck Roberts underscores this: He sold billions in these products, raking in commissions while clients suffered massive losses. This article breaks down the history, costs, poor returns, and why firms push them—simple for anyone to grasp why investors get burned.
History of Structured ProductsStructured products blend bonds with derivatives on stocks or assets, touting protection but frequently faltering.
Early Days:Â Emerged in Europe during the 1980s for custom bank deals, gaining traction in the UK by the early 1990s as "safe" options for retail investors chasing upside.
US Expansion:Â Boomed in the 2000s on Wall Street. Post-2008 crisis, marketed as "principal-protected" to wary investors, yet many imploded, echoing Lehman Brothers' failures.
Current Landscape:Â Trillions in issuance persist, but volatility spikes complaints. 2025 surveys show resilience amid uncertainty, yet cases like Stifel reveal enduring pitfalls.
The High Costs to ConsumersThese products entice with promises but erode wealth through fees and opacity.
High Expenses:Â Upfront fees often hit 1.5-5%, plus embedded costs that diminish net returns far below simpler alternatives.
Complexity:Â Dense prospectuses obscure risks like credit defaults or market plunges, leaving most investors unable to assess true dangers.
Limited Upside:Â Gain caps forfeit market booms; you bear full downside while reaping fractions of wins.
Miserable Returns: Studies confirm they drag portfolio performance, with lower risk-adjusted returns in volatile markets—often lagging bonds or stocks post-fees.
Why Brokers, Advisors, and Firms Love to Sell These ProductsUnder the lax suitability standard—not fiduciary duty—firms favor these for profits, ignoring superior options for clients.
Huge Commissions:Â Brokers pocket 3-7% per trade, dwarfing fees from basic investments. Roberts at Stifel amassed $61.4 million from $3.7 billion in notes.
Firm Profits: Entities like Stifel retain high-earners despite red flags, as initial revenues eclipse lawsuit costs—until totals exceed $180 million.
Conflicts:Â Non-fee-only setups mean advisors serve the house first, pushing complex fare for incentives, inflating client risks and expenses.
The Stifel Incident: A Perfect ExampleRoberts peddled "safe" structured notes at Stifel, but volatility exposed the ruse, costing clients dearly—proving Rezny's point on profit-driven harm.
What Happened:Â Notes linked to biotech or banks cratered in 2021-2022 downturns, despite low-risk pitches.
Complaints Surge:Â Over 35 claims since 2022; recent $3.4 million settlements push total damages beyond $184 million.
Retention Despite Risks:Â Suits began in 2022, yet Stifel kept Roberts until July 2025 for his revenue; FINRA barred him for non-cooperation.
Investor Harm:Â Unsuitable for conservatives or retirees, these wrecked portfolios, triggering forced sales and evaporated savings.
Other Examples of Structured Products ComplaintsBeyond Stifel, investors routinely suffer from these, with retirements on the line.
XP and BTG Cases (2025):Â Brazilian notes tied to Ambipar stock plummeted to zero, igniting overselling complaints and retail losses.
Avantax and Similar (Aug 2025):Â Unsuitable sales prompted regulatory halts; Arizona ceased a broker's operations over risks.
FINRA Settlements:Â Recent payouts for mis-sold notes, including a $132.5 million Stifel award with punitives for unsuitability.
Broader Losses:Â Reverse convertibles and autocallables trap investors with illiquidity and fees, jeopardizing holdings in downturns.
Why Investors Are Being Taken to the WoodshedThese instruments amplify risks while obfuscating them; non-fiduciary sales under suitability let greed prevail, vaporizing savings.
Hidden Dangers:Â Marketed as secure but prone to crashes; no easy exits lock in losses.
No Best Interest: Suitability permits "adequate" picks, not optimal—conflicts erode client value.
Firm Greed:Â Revenue trumps oversight, yielding devastated portfolios and lost retirements.
Wake Up:Â Choose fee-only like Rezny. Vet via BrokerCheck, demand fiduciary status, seek unbiased opinions.
This exposes why Rezny rejects structured products—they undermine rather than enhance wealth. Demand better: Trust demands verification.
General informational content only. Not tax, legal, or investment advice. Consult a financial professional before making investment decisions. Conduct due diligence. All investments involve risk, including potential loss of principal.
Sources
All sources are from August 1, 2025, to October 31, 2025, unless noted for context. All links have been verified as working and accessible (one requires cookies enabled for full access; another shows a maintenance note but loads). Here's the full list with clickable links:
Do structured products improve portfolio performance? A backtesting exercise - ScienceDirect, Oct 2025
Fixed-Income Structured Products in 2025: Resilience and Opportunity in Credit Markets | SOLVEÂ - SOLVE, Sep 2025
Structured Products 2025 Outlook - AAM Company, Aug 2025
Investment Solutions Awards 2025: Structured products gain favour - The Asset, Sep 2025
Structured for Volatility: Global Market Sentiment Survey 2025/2026 - Chapter 1: Sentiment - Structured Retail Products, Oct 3, 2025
Structured Products: Clear & Complete Guide | Homaio - Homaio, Aug 11, 2025
Understanding the Factors Driving the Demand of Structured Products - Wiley, Aug 2025 (cookies required for access)
Fiduciary Financial Advisors Are Not All Equal: What You Need To Know - Forbes, Sep 27, 2025
Fiduciary Standard of Care vs. Suitability: What's the Difference? - PlanCorp, Oct 2025
Fiduciary Rule vs Suitability Standard: Key Differences Explained - Scottsdale Wealth Advisory, Sep 2025
Stifel Pays $3.4 Million to Settle Three More Claims Against Barred Broker - AdvisorHub, Oct 28, 2025
Sources: Raymond James Eyes Stifel Amid Legal Troubles - WealthManagement.com, Oct 29, 2025
Broker Misconduct Investigation: Chuck Roberts (Stifel, Nicolaus & Co.)Â - KlaymanToskes, Aug 1, 2025
Stifel Pays $3.4 Million to Settle Three More Claims Against Barred Broker - AdvisorHub, Oct 28, 2025
Question: Are Structured Products Worth The Risk? - YouTube (Rezny Wealth Management), Aug 1, 2025 (click to watch video)
Are You Getting Financial Advice or Just Being Sold Products? - YouTube (Rezny Wealth Management), Oct 2025 (click to watch video)
Behavioral Finance: Individuals Investment in Financial Structured Products - World Scientific, Sep 2025
How To Recover Losses From Investing in Structured Products - Investment & Securities Fraud Lawyer, Oct 2, 2025
Losses in XP, BTG structured notes renew debate on retail overselling - ValorInternational, Oct 8, 2025
Structured Product Loss Lawyer | FINRA Arbitration Attorney - Levin Law, Sep 17, 2025