Designated Investment Products (DIPs): Financial Instruments Approved for Retail Investors

In regulated financial markets, not every investment product can be offered freely to all investors.
Some products are restricted to professionals, while others are approved for retail investors because they meet specific transparency, disclosure, and suitability standards.
These approved products are called Designated Investment Products (DIPs).

In simple terms, a Designated Investment Product is a financial instrument officially recognized by regulators as suitable for sale to the general public under specific laws and investor-protection rules.

Core Idea

A Designated Investment Product (DIP) is a regulated financial product that has been designated or approved by a financial authority (such as the Monetary Authority of Singapore (MAS), the FCA in the UK, or similar bodies) for retail distribution.

The purpose of this designation is to protect investors by ensuring that products sold to them are appropriately structured, clearly disclosed, and not excessively complex or risky for the average consumer.

In Simple Terms

Think of Designated Investment Products as the “approved investment menu” for everyday investors.
Regulators examine certain financial products — like funds, bonds, or derivatives — and decide whether they are safe and understandable enough to be sold to the public.
If a product passes those checks, it becomes “designated,” meaning licensed financial advisors or institutions can offer it to retail clients.

Examples

Designated Investment Products often include:

Collective Investment Schemes (CIS) such as mutual funds or unit trusts

Investment-linked insurance policies (ILPs)

Exchange-traded funds (ETFs) and certain structured deposits

Government or corporate bonds offered under public programs

Approved derivatives that meet clear disclosure and margin requirements

For instance, in Singapore, the Monetary Authority of Singapore (MAS) classifies products like unit trusts and ILPs as DIPs.
Financial advisers must assess a client’s knowledge and experience before recommending these products.

Real-Life Application

When a financial adviser sells a Designated Investment Product, they must ensure the investor understands the product’s nature and risks.
Under frameworks such as Singapore’s Financial Advisers Act or the UK’s Financial Services and Markets Act (FSMA), institutions must:

Conduct customer knowledge assessments

Provide clear disclosure documents

Avoid selling highly complex or leveraged products to inexperienced clients

This process helps protect individuals from losses caused by unsuitable or opaque investments.

Common Misconceptions and Mistakes

“All investment products are designated”: Only products reviewed and approved by regulators qualify as DIPs.

“Designation means zero risk”: It ensures transparency and suitability, not guaranteed returns.

“DIPs are only mutual funds”: They can include insurance-linked, bond, or structured products depending on jurisdiction.

“Designation applies globally”: Each country’s regulator maintains its own list or framework — what’s designated in one country may not be in another.

Related Queries Investors Often Search For

What qualifies as a Designated Investment Product under MAS or FCA rules?

How are DIPs different from non-designated products?

Do DIPs protect investors from losses?

Are ETFs considered Designated Investment Products?

How do financial advisers assess client knowledge before recommending DIPs?

Summary

Designated Investment Products (DIPs) are financial instruments that regulators have approved for sale to retail investors after ensuring they meet clear standards for disclosure, structure, and risk.
They help create a safer investing environment by ensuring investors buy products they can reasonably understand, while still accessing diverse investment opportunities.