They've been derided by Warren Buffett and feared by regulators, but some advisers are convincing clients that derivatives are helpful.

Back in 2002, when AIG was still in that ultra-exclusive Triple-A-rated club and its financial strength seemed all but unbreakable, the billionaire signaled an ominous warning in Berkshire Hathaway's annual report: "Derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal."

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