Investors have learned the hard way that investment products are not always as simple as they seem. The fallout from the Keydata and AIG scandals are still fresh in many of our client's minds, but what brought about those debacles was the mistaken belief that these "Structured Product" investments were guaranteed and the returns were therefore 'safe'. Whilst we must always be careful that we don't throw out the baby with the bathwater in our suspicion of this type of investment, the demise of Keydata is a lesson to be learned. Its collapse not only led to heavy losses for investors but ultimately to a record miss-selling fine for Norwich & Peterborough of £1.4M. Shortly after, the building society closed down it financial services arm.

But Keydata is not the only example; back in early 2008 I remember being visited by AIG trying to promote their "Guaranteed" product range to us, yet when I asked how the guarantee worked, the response was, "we are AIG - one of the biggest institutions in the world"; as if my question was somehow derogatory. We didn't purchase the product, because if those promoting the products resort to crass cliches it proves that they don't actually know how they work. A few months later, AIG's strife and near collapse vindicated our decision. It was only the intervention of the US government which saved AIG from going under.

Yet it seems some high profile companies still haven't learned from these lessons. UBS have seemingly managed to lose a whopping £1.5 billion through investment structures that we have previously been led to believe are cheap and easy to understand, i.e. Exchange Traded Funds or ETFs as they are better known. UBS engaged in internal trading of counterparty risks, i.e. that part of the product designed to protect assets. Seemingly such trading activity beat all their security checks and it gives a worrying insight into the arrogance and ease with which some financial institutions still believe they can beat the system, putting money at risk and believing they won't get caught.

Again, it's important to point out that not all ETFs and institutions are guilty of these practices and one off episodes are not a signal to ignore the whole product or investment range, but they do breed mistrust in investors at a time when ethical working practices are desperately needed to underpin market volatility.

For as long as individuals or providers try to be too clever, the ghost of Lehmans will linger on. Our philosophy has always been very clear, keep things simple and only invest in assets which we fully understand and which offer good long term returns based upon common sense. We believe that if something seems to good to be true, it probably is.

As independent advisers, we need to be aware of all these different assets and consider them when making recommendations, but common sense must prevail based upon the lessons of history. We are not ashamed to say that we buy what we believe in based upon the facts. We buy investments we are confident to invest our own money in. Maybe that is boring, but we would rather be boring and reliable than exciting and bust.