But the recent collapses of Westpoint, followed by Fincorp and Australian Capital Reserve have shown it is clear investors, who plunged about $1 billion into them, need better guidance on how to evaluate risk.

It's equally clear that promoters need to be blasted out of their "anything goes" free-market mentality.

The result is a new guide from the commission aimed at bringing promoters into line and providing more safeguards for investors.

It is a good guide with eight benchmarks to show investors what they should look for before they plunge their retirement nest eggs or other savings into debentures or unsecured notes.

For promoters, the benchmarks must be observed or they risk attracting the regulator's attention.

If observed by both parties, it is less likely that more money will be sunk into property-based fixed-interest sinkholes.

The main message from the new guide is that there has to be a shift of focus from glowing returns to the risk taken to get that return.

It is clear that if first mortgage borrowers were prepared to pay 15 per cent for borrowed money, any investor getting paid between 7.5 per cent and 9.5 per cent for less than first mortgage security was not being adequately rewarded for the risk taken.

While the promoters are facing tougher rules, investors who are contemplating debentures and fixed-interest offerings need to read the prospectus to flush out the information they need to make an informed decision. The benchmarks in the commission's guide include:

* Whether the promoter has equity capital invested in the business. The minimum equity component should be at least 20 per cent for property development projects and 8 per cent for non-property.

* There should be at least three months' cash flow available to pay interest as well as be able to return the capital of exiting investors.

* Automatic rollovers are one way promoters lock money in. If investors want to avoid having money automatically reinvested, the issuer should state in the prospectus what happens at the end of the investment term. Notice periods should be sufficient to allow for decision making.

* Credit ratings give an indication of the risk of not getting money back, as assessed by independent assessors. Any credit rating lower than BBB - which indicates moderate credit quality - means investors are stepping into speculative, highly speculative and high-default risk territory.

* Loans should be spread among diverse borrowers and avoid concentration in the same geographic location. Loan size, number, proportion in arrears or default and whether they are secured or unsecured, are critical.

* All related-party transactions should be closely scrutinised, as the risk with such loans is that they may not be made with the same rigour and independence as transactions made on an arm's-length basis.

* Property valuations are critical - how often they are made, are they from one valuer or a panel, what is the loan-to-valuation ratio and on what basis are properties valued. Care should be taken where valuations are made on a purely "as if complete" basis and where the project has not been commenced.

* The loan-to-value ratio for property development projects should be no higher than 70 per cent of the latest "as if complete valuation" and 80 per cent for other types of investments.

For more information about the benchmarks see www.asic.gov.au.