This paper examines how financial sophistication influences household investment outcomes in complex financial markets. Using regulatory microdata from Brazil’s structured products market, we analyze how returns vary with investor sophistication and product complexity. We introduce a novel measure of financial sophistication: prior trading experience in other securities markets. Investors with established trading histories systematically outperform inexperienced counterparts when trading complex products, exhibiting both persistent skill and greater learning capabilities. This experience-based measure is more predictive than conventional proxies such as wealth, age, and education. Our findings suggest that complexity can effectively obscure risk from unsophisticated investors, enabling strategic rent extraction through product design. These results question the efficacy of current “qualified investor” standards based on wealth thresholds, suggesting that direct measures of market participation provide more effective criteria for accessing complex financial instruments in increasingly sophisticated retail markets. (coautoria com Jason Sturgess – Queen Mary University of London, Jose Liberti – Northwestern University e Pedro Saffi – University of Cambridge)