Yes, right, if you have a foreign-exchange derivative product that carries “lucrative fees,” that means that the customers don’t understand it. (If they understood it, they’d demand lower fees.) If you have a product like that, you will naturally be tempted to sell it to as many customers as possible. And then every so often, something will go wrong, and you’ll have to spend a year or two resisting that temptation and having contrite no-materials meetings with the customers to make them feel better.

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FROM:

Matt Levine

Money Stuff: UBS FX Trades Were Too Good

The dangerous things and the things that are most risky and that people understand the least are the ones that cost the most. But they’re the most lucrative, so companies might mistakenly incentivize people to sell them more. Leading to bigger risk to the ones offering it.