Diversified portfolios should include asset protection products as an asset class, just as they contains equities, bonds and alternatives as asset classes, said Graham Day, managing director of individual retirement at Equitable, a financial services company.

Structured products such as annuities and insurance products can be a valuable asset class, especially in the chaotic market that exists now, Day said in an interview. He offered that such products can help create a well-rounded portfolio and asset protection plan for clients.

“This is an unprecedented time,” he noted. “We were on a tremendous bull market run that everyone was waiting to see when it would end. We just didn’t think it would end with a pandemic. Now a health crisis has roiled the markets and impacted how we think about savings and retirement.”

Small businesses in particular have been negatively impacted by Covid-19 because small business owners plow their money back into the business, thinking that the business will be their retirement. “Now they are feeling the brunt of the financial impact of the pandemic,” Day said.

In the past two decades, the markets have been slammed by a series of financial crises and disasters that have impacted the economy, Day said. “The tech bubble, 9/11, the 2008-2009 financial crisis, and now the pandemic all have caused financial fallout. That has caused a lack of retirement confidence, which shows the need for having a strong financial plan with protections against market downturns.”

When looking at structured products as protection for assets, some retirement savers may want to take advantage of the Retirement Savings Contributions tax credit, Day said. Under this credit, married taxpayers filing jointly may receive a credit worth 20% of their contributions to a qualifying retirement plan if their adjusted gross income falls between $31,126 and $48,000.

“The financial industry is doing a much better job of creating financial plans than it did in the past,” he said, adding that such plans are needed in volatile market situations such as the pandemic.