HIGH-net-worth individuals need to understand the relationship between risk and return to maximise investment potential, an investment analyst says. Richard Harris, chief executive of Jardine Fleming Private Investments, described the average HNW person as someone with more than US$1 million (HK$7.73 million) to invest. Many clients, having created wealth through business ownership or property, were confused as to how to protect and invest assets. 'If you look at most investment information, it is difficult to read,' Mr Harris said. 'Part of what we try to put across is that it is not a simple business. But there are some simple concepts.' Mr Harris said the JF investment line focused on the relationship between return and volatility. Simple banking products such as a savings account represented a good starting point for investment with low risk and low return. At the high end, individual stocks could provide high yields but with high risk. In the middle was a balanced investment portfolio. Some people in the territory owned a couple of flats but did not regard themselves as wealthy. Many HNW individuals suddenly decided they needed to invest and took the preferred route, high-risk stocks. Often, the stock dropped in the first week of ownership. Aspiring investors needed to plan more carefully, he said. 'A lot of these people have owned factories or businesses, so they have already taken a risk in starting them up. 'Having a balanced portfolio will give you middle risk and middle return. It is better than cash in the bank. 'Most people are happy to leave it there [in the portfolio] because they are probably not going to spend it in their life time.' With Jardine Fleming offering a number of private investment products, both discretionary and advisory, Mr Harris said an investor could get into a MUT (Managed Unit Trust) with a minimum of US$250,000. Representing the least expensive of the four 'Fleming Funds' in its unit trust stable, the MUT is a relatively low investment method that permits the investor quick access into the global market. There are five categories of MUT: Pacific Basin, Global Growth, Balanced Global, Conservative and Restricted. 'The MUT is, essentially, a fund of Jardine Fleming funds,' Mr Harris said. 'It provides fund management for the guy who normally would not be able to afford it. 'Through unit trusts and documents, we buy a series of portfolios and the fund manager adjusts the allocations to get the best performance.' For US$1 million, the Premium portfolio represents a more sophisticated investment which has to do with asset protection. 'When a person decides to get into a Premium portfolio, the money is given to a senior fund manager. He will invest it directly into quality stocks; for example, Hongkong Bank of British Telecom. 'This is a less volatile method of investing. It's all about congregation of assets. It's supposed to be the core of the family's portfolio and much more for asset protection.'