The last 15 years have witnessed a shift in schizophrenia research with increasing interest in earlier stages of illness with the hope of early intervention and ultimately prevention of psychotic illness. Large-scale longitudinal studies have identified clinical and biological risk factors associated with increased risk of psychotic conversion, which together with symptomatic and demographic risk factors may improve the power of prediction algorithms for psychotic transition. Despite these advances, 45-70% of at risk subjects in most samples do not convert to frank psychosis, but continue to function well below their age matched counterparts. The issue is of utmost importance in light of the upcoming DSM-V and the possible inclusion of the attenuated psychotic symptoms syndrome (APSS) diagnosis, with clinical and ethical implications. Clinical considerations include feasibility of reliably diagnosing the at risk state in non-academic medical centers, variable psychotic conversion rates, a non-uniform definition of conversion and extensive debate about treatment for individuals with an ill-defined outcome. On the ethical side, diagnosing APSS could lead to unnecessary prescribing of antipsychotics with long-term deleterious consequences, slow research by providing a false sense of comfort in the diagnosis, and have psychosocial implications for those who receive a diagnosis. Thus it may be prudent to engage at risk populations early and to use broad-spectrum treatments with low risk benefit ratios to relieve functional impairments, while simultaneously studying all subsets of the at risk population.