When it comes to your money, who do you trust to give you good advice?
Several studies lately have shown that for everything from KiwiSaver to property investments, New Zealanders are likely to ask friends and family to tell them what to do.
But this is really dangerous advice. Investing money on the basis of what someone else suggests or what worked well for someone else gives you no indication that it's a good strategy for you.
In the worst situations, it can go really wrong. There have been high-profile cases in court this month in which people have invested money with people they know, then been a lot less strict checking up on what they were doing with it because they were friends.
Jacqui Bradley was found guilty of 75 fraud-related charges linked to 28 investors who lost $15.5 million. Many of them were her friends, one a woman she met through her daughter's school.
In another case, Evan Paul Cherry pleaded guilty to a $5 million fraud involving misapplication of investor funds and false statements in investor reports.
SFO chief executive Adam Feeley said at the time that the case illustrated the importance of looking beyond personal connections and carefully assessing the risk of investments. It's not who you know but what they know that counts.
Even if your friends are the most knowledgeable investors in the country, they need to treat you as they would any other investor: with proper reports and full disclosure of where your money is being invested.
For financial matters, I recommend professional help. New regulation has weeded out a lot of the financial advisers who were giving the industry a bad name.
Get an impartial expert to go through your options, whether you are expanding a huge property portfolio or thinking about where to put your KiwiSaver account. Also, ask your bank manager, accountant and lawyer about investment options.
They will tell you they are not financial advisers but can help direct you to advice on what may be good or bad investments. You need to know how long you're willing to invest for, understand risk vs return and consider the liquidity of your investment.
Tax is also something to consider. If the investment is risky with a promise of good returns sounding too good to be true, steer clear or never invest more than you're willing to lose.
It will be easier to ask your impartial, qualified, reputable financial adviser about funds over a disclosure statement.
Anyway, having to ask your friend or family member at the next barbecue about your investment can put a damper on the evening, especially if it's bad news.