When sitting with a prospective client recently, the conversation revolved around understanding investment returns.  The client told me about friends who had lost all their investments with Bernard Madoff and said she definitely didn’t want to expose herself to that amount of risk.  However, in the same breath she told me that she had heard of structured products offering 16% return in the first year and 32% in the next, and so on.

Unfortunately, the hunt for inconceivably high returns continued when she proposed investing the majority of her funds in one investment property, saying "isn’t it a given fact that investing in property and renting it out is a sure winner?"….Hmmm.  Have people already forgotten what has happened in the last eight months?

I fear she is not alone as the search for above average returns clouds the judgement of the ill advised.  In addition to explaining risk in the context of a sustainable investment it is important to save people from product pushers, the financial press and themselves

People would be well advised to seek out advice from a fee based financial planner who offers an investment experience that is backed by academic research and who is equipped and motivated to provide financial mentoring over a client’s financial journey; rather than opting for "advice" offered by commission driven "advisers" who would find it hard to demonstrate how they truly have a client’s best interest at heart.