By Sandy Murray BBC Scotland business unit

MPs on the Treasury select committee have questioned senior executives from Aberdeen Asset Management as they mount an inquiry into split capital trusts. The company was a major player in the complicated investments which, in some cases, have collapsed completely.

Split capital trusts started as a way of tailoring investments to an individual's needs.

They each offered two or more classes of investment, allowing customers to choose either regular income or growth in the underlying capital value.

Opting for capital growth rather than income helped some investors reduce their income tax bills.

In their original form, these trusts carried no more risk than any other stock market investment.

Investors have seen their savings suffer

But some trusts sought to increase returns in a way which increased risk.

With share prices rising, and interest rates low, some borrowed additional funds to invest in the stock market.

This increased returns in the good times, but left them facing much greater losses as the market fell.

As well as borrowing additional funds, some of the trusts invested in each other.

This led to allegations of a "magic circle" - that the cross-holdings may have been in the interests of the fund managers, but not in the interests of investors.

Financial ruin

As the value of some trusts fell alarmingly, the complicated network of holdings meant many others were damaged too.

The collapse of split capital trusts has left many small investors facing financial ruin.

Some of them allege that the trusts were sold to them as being a safe place for their savings.

Legal action is being threatened against the companies which managed the trusts and the advisers who recommended their products.

The Treasury select committee is currently trying to disentangle the complicated story of what went wrong with these trusts.

It also wants to ensure that private investors will in future have better information to assess the risks involved in choosing where to put their money.