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The UK Financial Services Authority said it is to look into the way structured products are sold in the UK, as it follows up on consumer complaints about such plans that had been backed by Lehman Brothers, the US investment bank that collapsed last year.

In a statement, the City watchdog said it and the Financial Ombudsman Service had “jointly concluded that Lehman Brothers’ insolvency raises issues in the UK structured products market”.

“As a result, while the ombudsman has been investigating a number of individual complaints, the FSA has been actively looking at the wider issues raised in this market,” the statement said.

It said all complaints that had been filed will be frozen while the investigation is carried out.

Structured investment plans have become popular recently because many advertise a “capital protected” feature that appeals to investors who have lost money in other types of investments recently, such as mutual funds and equities.

Until Lehman Brothers failed last September, the counterparty risk involved in backing such products had not been widely understood by many consumers.

A separate document on a website shared by the FSA and other regulatory agencies (www.widerimplications.info) notes that an FSA review of the marketing literature for Lehman-backed structured products had been completed, and that the FSA was in the process of evaluating the findings.

“A further priority...is to prepare for an assessment of the quality of advice for these products,” the document says.

“Thirdly, it is conducting an analysis of the wider market for structured products in the UK which will feed into the overall review.”