Higher yield products aimed at individuals souring fast


There once was a day when people could grow old and live comfortably off of their savings. Recall just how high interest rates were back in the 1980s. The long slow bull market in bonds since then has unfortunately wreaked havoc with the savings of all people, not just seniors, as the hunt for yield has led to lots of quacks and fraud artists marketing dubious products.

"Tens of thousands of them put money into speculative bets promoted by aggressive financial advisers. The investments include private loans to young companies like television production firms and shares in bundles of commercial real estate properties," notes The New York Times. "Those alternative investments have now had time to go sour in big numbers, state and federal securities regulators say, and are making up a majority of complaints and prosecutions."

The state of Massachusetts recently fined LPL Financial $2.5 million for various practices regarding the sale of non-trading REITs. Elsewhere, regulators have noted a spike in cases regarding alternative investments offering stunning high yields being marketed to Mom-and-Pop investors.

This is quite similar to the lunge by big institutional investors for higher-yielding fare that prompted so many to embrace risky CDOs and the like. In the end, every sector fell victim to the stunning bull market in fixed income that had such a profound effect on the investing landscape. It certainly highlights the strong demand for sound wealth management services at the retail level.

Investing for the future has rarely been as challenging as it is now.

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