This is the third in a series reviewing the Bermuda Investment Business Act. Today's section carries the third and fourth wishes for changes to the Act that will benefit the investing public. The first and second parts of the series appeared on November 10 and November 17; copies may be obtained by calling The Royal Gazette.

Soon, if not already, proposed amendments to the Bermuda Investment Business Act 1998 will be debated in Parliament. Note in the Act, investment provider implies investment firm and advisors working therein.

Wish List Item Three

Suitably qualified investment personnel. The Act says Responsible conduct: Where the investment provider employs staff or is responsible for the conduct of investment business by others, it shall have adequate arrangements to ensure that such people are suitable, adequately trained and properly supervised. In the investment advisory business generally, the minimum requirement is a securities licence, which does not necessarily translate into experience. How does one define suitable? Who is adequately training these people? Who certifies the trainer? Who certifies the supervisor? If you hang a sign outside your home to practise financial advisory services, how can you be supervised if you are working alone? What is the minimum standard for comparison? Every advisor selling investments or providing investment advice (and that includes financial planners who are also deemed to be in the business of providing investment advice) should be required to have a current recognised securities licence, the standard being US NASD Series 7 (UK, CDN).

In fact, licensing should be mandatory for every person in investment circles who is deemed to be providing advice to the client. Grandfather exemptions from securities exams can be provided for those who have obtained licenses elsewhere. All licensed advisors' names should be posted on a Website such as the Bermuda Stock Exchange or the Bermuda Monetary Exchange.

Do you think that is unfair? Picture yourself going to see a para-Doctor, a para-Lawyer, a para-Dentist, para-Pharmacist working from his/her home. Would most people ever consider this option?

Furthermore, the Bermuda Bar Association, Bermuda Dental Association, Bermuda Medical Association, the Bermuda Pharmacy Council would be up in arms, issuing injunctions to stop such unethical practices. Yet the Bermuda Investment Industry has not followed regulatory suit. Is this fair to the client?

And to be terribly self-serving, is this fair to licensed securities professionals who have successfully participated in an education, experience, ethics and exam process? The Bermuda Stock Exchange has a wonderful programme to educate and help advisors pass this exam.

It should be fully supported.

Wish List Item Four

Client process for complaints, arbitration, redress. The Investment Act is silent on the rights of the investor client. Generally, an unsophisticated investor seeking redress from a financial institution for a perceived wrong should have the right to advocate their own cause within the framework of a clearly defined process. Currently, the burden falls to the investor to document an investing process they may not have fully comprehended from the start followed, perhaps, by presenting the complaint to the Bermuda Monetary Authority. Even if the investor complaint then appears to be valid, there is no defined regulation regarding recourse, relief, or any other appropriate conclusion. Basically, unless the investor can remove emotion from the process and can afford to hire an investment specialist attorney, it may be impossible for them to even attempt filing a grievance. Indeed it is time that the Bermuda Monetary Authority, as an autonomous agency, is granted more supervisory and regulatory powers.

If Bermuda is to compete with the rest of the world in the arena of international finance, we need to continue to raise the bar for the highest and exceptional professional standards. Nothing less is acceptable. If you are not part of the solution, you are part of the problem. I personally volunteer to be part of the solution.

Martha Harris Myron CPA CFP is a Bermudian Certified Financial Planner (US) practitioner, with an NASD Series 7 licence, and United States tax practitioner. She is the winner of the 2001 Bermudian Magazine Bermuda Gold Award for Best In Bermuda Investing Advice.

Opinions, concepts, and ideas are those of the columnist alone, and are not to be construed as solicitations, authorisations, or endorsements by any organisation, commercial or non-profit. The Editor of the Royal Gazette reserves the final right to edit content or consolidate where appropriate in any circumstances. Under no circumstances are the comments in this column to be taken as specific recommendations on the purchase or sale of securities or any other investment, nor as specific financial planning advice and recommendations.