These  were the collateralised debt obligations (CDOs). As Warren Buffett correctly predicted they turned out to be "financial weapons of mass destruction", leading to the global financial crisis in 2007.

I remember sitting in front of the chief executive in the local arm of a global investment bank in the early 2000s as he explained why every small investor should be loading up on CDOs.

As he explained it, technology had allowed US home loans to be risk rated then carved up into little parcels of debt that were bundled together and sold to retail investors.

I was shown a spaghetti junction map of how the CDOs worked. It was the most complex thing I had seen in my life.

I had an inkling that the things were probably toxic, but more in a slow-burn, high-fees kind of way.

There is no surer way of eating into returns than high costs and fee costs. And, along with the rocket scientists, there seemed to be a lot of other mouths to be fed in the chain that led to them being put in front of retail investors.

Complexity favours the provider. The greater the complexity, the easier it is to hide fees and charges.

Of course, it was somehow forgotten that in the US, a borrower can walk away from his property if the value of the property falls to less than what is owed and the borrower loses his  job.

In Australia, lenders have full recourse, which means they chase the borrower for any shortfall between what the property sells for and what the lender is owed.

In the US, in the mid-2000s, when house prices started falling, home owners walked and the CDOs blew up, precipitating the biggest financial crisis since the 1930s.

As it turned out, Australian retail investors mostly did not invest in them. Some investors were burned through Sydney-based hedge fund Basis Capital and NAB also took a hit.

Some councils also took the bait – hook, line and sinker.

Of course, there is no doubt that innovation in financial services can be very good for consumers, investors and savers.

And, thankfully, when people talk about such innovation it mostly means online marketplaces that match buyers with sellers of financial products.

These "fintechs" are not, as far as I can tell, creating dangerous investments.

I suppose just like the guy who starts a cafe would like to be seen as an "entrepreneur", almost everyone wants to be seen as an "innovator".

If there is a danger with fintechs, it is with the viability of the businesses themselves.

Peer-to peer lenders, for example, do not lend themselves, but act as an exchange between those looking to borrow and those with money to lend to them.

But they are not prudentially regulated and so do not need capital buffers and so on. Some are part of global organisations, but most are small beer.

They can only sell their financial products to ordinary consumers if they have a licence from the Australian Securities and Investments Commission.

But that is to help ensure that certain minimum disclosures of the investment risk are made. It says nothing about the continuing viability of the business.

Twitter: @jcollett_money