The composite case below does not represent any living person or place. It is a composite of various scenarios seen over more than 25 years of industry experience.

The investment industry in developed countries is a mature and accessible industry, and has been for at least three decades. Long gone are the days when investing was the purview of the rich and redolent – because they could. Choosing blue-chip companies and playing stock markets was considered a gentlemen's sport, fostered by a built-in close club camaraderie. Deregulation and the Internet age, accompanied by intense competition for the customer dollar has opened these markets up to everyone.

The proverbial gold (securities investments) in them thar hills at the turn of the 19th and 20th Centuries was subject to manipulation, secrecy, insider information, and downright fraud. One might say that it really hasn't changed that much, but there is significantly more regulation now – designed to protect the small investor from the so-called avarice of the investment providers, read financial salespeople or their financial institutions. With each notoriously flagrant violation committed over the years, various Investment Acts in the United States, for instance, have been enacted to address these egregious crimes – for there's nothing worse than seeing small trusting investors lose their savings, through no fault of their own.

Regulation enforces transparency and fiduciary standards within the investment universe by the use of powerful tools: punishment, peer pressure, and enforced elevation of client care. Investors, themselves, now too have a responsibility – that of acquiring (and continuing to acquire) investment knowledge. If the investor – you – are not willing to educate yourself about the salesperson and the investments you are being sold, then ultimately, who do you have to blame?

Frequently, anonymous individuals have shared sad stories of investment losses and feelings of betrayal. Further questioning often highlights facts such as:

¦ They never independently verify the provider salesperson's credentials, especially when introduced by a friend. The element of trust can be abused, even by friends.

¦ They don't ask where he/she obtained their licence, or even bother to search the Internet for a second opinion. I have found securities fraud cases listing all investment providers involved, by name, in a matter of minutes – they are there.

n They assume titles listed on provider business cards are real professional qualifications. There is no such thing as a qualified financial planner or a qualified financial advisor, for instance. These are generic terms describing the processes not the licensed professional who has undertaken a two to four year course of study culminating with serious exams conducted by professional global licensing bodies.

¦ They do not ask any (or enough) questions about the investments, or their structures, the price, the quality, or general business stability.

¦ They neglect to ask the salesperson to explain how the process works and what the real risks are, not even general questions such as" can I get my money back if I need it immediately", they just assume that cash will be available. Some alternative investments require at least 180 days notice or longer before you can redeem into cash.

¦ They don't take notes of the meetings or ask for current supporting literature

¦ They tend to assume an investment will be guaranteed, or that the rate of return promoted will stay in that range, and are shocked when the product does not meet their expectations.

¦ They place far too much trust in meeting someone for an hour, who will be entrusted to invest their life savings, safely.

Two weeks ago, Moneywise ran an article concerning the Bermuda Monetary Authority issuing their Consultative Draft Paper on their website Securing Enhanced Protection for Investors: Revised Code of Conduct for Investment Providers. Go to Moneywise archives at the Royal Gazette –Raising Standards of Customer Care for the Investment Industry.

We set out a client composite case to illustrate the issues that can arise while working with an investment provider handling the case of an elderly client close to retirement with an ailing spouse. After you reread the case and the analysis below, there is only one question to be answered: Did the investment provider adhere to the New Professional Code of Conduct? Answer and you let me know what you think:

?Client thinks that the investment is guaranteed, and is not enlightened to the fact that it is not; furthermore it is on the higher end of risk spectrum.A twelve percent rate of return is unrealistic, but who can resist? Look at the income, he says, "he can get here every year" more than $24,000. Note that the consequences of downside loss are not even mentioned.

? A salesperson is recommended by cruise friends; he has an expensive shiny suit, but where are the qualifications? He is evasive about the credential questions, nor does he offer to produce any. At the least, he could have indicated he had taken a few courses or a certificate – in something related to investments. Very concerning – the investment provider does not appear to have a permanent place of employment. This means he could be a suitcase salesman, or he is simply being far less than transparent about his real job. I've done a complete rant about salespeople coming to Bermuda or anywhere that they do not have a permanet place of business. (see Moneywise February 18, 2007, why trust your life savings to a traveling saleman).

? Client's spouse has onset Alzheimer's. Her medical insurance (that covers him) is linked to her job and she has concerns about redundancy. Two household people rely upon her for sole support. She is the only breadwinner.

? There are no fees, he says. It is amazing how many will truly believe this statement. There is no explanation at all about what kind of investment, where it will be held, fees or commissions to the provider, penalties, incentives, and administrative costs. Trust me – no one, but no one, is in business for free.

? Danger, danger. Client is close to retirement, but still has an outstanding mortgage. His suggestion that she encumber her mortgage with a further charge is a terrible conflict of interest. The salesman is trying to achieve a double dip day by being paid for the investments in commissions and a referral fee for placing an additional mortgage. There have been cases of adult children inducing their parents into upping their home equity line of credit, then investing the cash in the securities market, only to lose everything. All family dreams of a modest retirement gone. The people who love their children will be paying for that love with a higher mortgage principal and interest payment for the rest of their lives.

With the new improved Investment Business Code of Conduct, the Bermuda Monetary Authority has given you the right to ask many detailed questions of your investment provider about his/her qualifications, method of compensation, kind of product and suitability for you. This is your opportunity to fully understand your investments and the qualifications that your provider has (or not). Never let someone else be totally responsible for your financial well being.

After thorough research, if you find yourself a well-rounded investment professional, congratulations. Otherwise, repeat the refrain – I only have myself to blame for bad investment decisions.

Next, we finish the review of our composite case by providing my solution. What does it mean to have a qualified licence or financial designation? What does a qualified financial planner do that is very different from a financial salesperson?

Martha Harris Myron, CFP(US) TEP(UK) is an international Certified Financial Planner™ practitioner in a multi-family office for private wealth management. She specialises in independent fee-only cross border investment, tax, estate, and strategic retirement planning services for Bermuda residents with cross-border connections, and US citizens living abroad. Contact martha.myron@gmail.com">martha.myron@gmail.com or 296 3528 at Patterson Partners Ltd.