In insurance products and structured products, it is not easy for investors to understand exactly what fees are being charged. In structured products,2 for example, the investor could be given a formula for the return on his principal but that is really the net return in his hands. He is not told what the actual gross return generated from that product is. The difference between the two is what the manufacturer and the distributor cream from the buyers of structured products. Such hidden charges are also embedded in complex products like ULIPs.
