When Karen Robinson's husband died, she worried she wouldn't have enough money to raise her two young girls and save for retirement.

Then she met a financial planner, Tom Parks, who told her about investment partnerships that would allow her to ride the boom in US oil and gas production while receiving a steady stream of payments to help pay her bills.

"He showed me this picture of the United States, and said they were getting oil out of shale, and energy was the way to go," says Robinson, a Texas high school teacher. She liked that Parks seemed so confident. "I trusted him."

Two years later, her partnerships have plunged in value and Robinson has lost more than half of the $US202,000 she invested, according to a complaint filed with regulators against Parks and his firm, Ameriprise Financial Services. Parks did not return phone calls and emails; Ameriprise declined to comment.

For years, brokers have been luring savers like Robinson into drilling partnerships with the promise of fat payouts. With yields on safer investments like government bonds so puny, it wasn't a hard sell. But now this once hot business, a big source of fees for brokers and banks, is coming to a messy end.

In the past year, investors have lost $US20 billion ($A27.59 billion) in publicly traded drilling partnerships, or $US8 of every $US10 they had invested, according to a report prepared by FactSet for The Associated Press. That figure does not include losses from $US37 billion of bonds sold by the partnerships in the five years since 2010, many down by half in past 12 months, or losses from bets on private partnerships that don't trade publicly and are difficult to track.

A plunge in the price of oil that few anticipated explains much of the loss. But many partnerships had borrowed heavily and were running big risks even when oil was twice as high a year ago, suggesting that either investors were too sloppy in their hunt for steady income or brokers too reckless in their hunt for fat fees - or some ugly combination of both.

"If you were trying to preserve your capital, oil and gas producers were not for you," says Ethan Bellamy, a financial analyst at RW Baird. "They were always higher risk investments."

The losses on partnerships are piling up as investors are having second thoughts about their headlong rush into other high-yield, high-risk securities, like bonds from volatile emerging markets or from highly indebted US companies, called "junk" because they are so dangerous.

In the first eight months of 2015, investors have yanked $US4 billion each out of junk funds and emerging-market bond funds, according to the latest figures from Morningstar, a research firm.

The energy partnerships, formally called master limited partnerships, can avoid some corporate taxes by passing much of what they earn straight to their investors, called partners. These payments explain why the firms used to mostly stick to storing and transporting oil, unsexy businesses that generate a steady stream of cash. Bankers called them "toll booth" businesses, and it was meant as a compliment. With much of the cash going out the door as soon as it came in, you want boring predictability.

Then the Federal Reserve slashed interest rates to near zero to help revive the economy in the financial crisis, and that helped send yields on conservative investments like US government bonds plunging. Investors scrambled for alternatives to earn a bit more. Partnerships focused on drilling sprung up to meet the demand, dangling yields of six per cent or more, and Wall Street got busy selling their stocks and bonds.

In the five years to 2014, energy partnerships of all kinds raised $US21 billion in initial stock sales, more than twice what they sold in the five years before the financial crisis, according to financial data provider Dealogic. For help with the sales, banks like Citigroup, Barclays and Wells Fargo pocketed an estimated $US1.1 billion in fees, according to Dealogic. Fees from follow-up stock sales, plus bond offerings, added to their haul.

Because they can tap stock and bond markets to raise money, publicly traded partnerships appear to have plenty of financial flexibility. But that's not true in troubled times when investors are scared and money is needed most.

Story continues