By Lorna Tan

The term 'fact-find' cropped up in recent articles about Minibonds and DBS High Notes, the failed investment products linked to bankrupt Lehman Brothers.

It is a shorthand for what is known as the financial needs analysis process.

This is the process where customers are queried by financial advisers on their financial details.

The information is captured in a document that all retail investors should have come across before they signed up to buy a financial product.

The intention of a 'fact-find' is to give investors a better chance of buying the right product to meet their needs.

Some of the 10,000 investors who invested in Lehman products are now claiming that they cannot recall what they had signed, or if indeed they had been taken through a proper 'fact-find' process by their financial advisers.

There are a few possible reasons for this.

First, the financial needs assessment comes with four options. Customers can request 'full advice', 'partial advice', 'product advice' or 'no advice'.

These options should be offered at the start of the meeting with the adviser, upon which the customer ticks off an option box in what is known as a needs analysis form.

'Full advice' requires the customer to provide detailed financial information about himself so that the adviser can recommend a suitable product.

Some customers don't want this option because they prefer to keep their personal financial matters confidential or they do not trust the adviser, who could be a stranger to them.

If the investor had opted for 'no advice', he would not have provided any personal financial information.

Another possibility is that the adviser did not conduct a proper needs analysis and simply ticked 'product advice' or 'no advice' on the form without the knowledge of the investor - which is wrong - or persuaded the investor to do so.

But what most investors do not know is that when they opt for 'product advice' or 'no advice' during a transaction, they are putting themselves at a greater risk, warned Mr Christopher Tan, chief executive of wealth management firm Providend.

'They can't blame the advisers for poor advice subsequently if things go wrong,' he said.