'The SFC in Hong Kong tells us to do our best to follow all of the rules and regulations [of the various regulators], but what does that mean?' said Quincy Wong Lee-man, chief executive of Convoy. 'In fact, the rules and regulations are unclear. There are many grey areas, so you're never sure if you're doing something wrong. There is a lot of room for interpretation.'

He would prefer one super regulatory body, like in Britain, to the present system in Hong Kong of several bodies.

Even though Britain is highly regulated, the rules of the financial planning industry are clear.

'In Hong Kong I communicate daily with the authorities to create a good environment for clients, regulators and us,' said Mr Wong.

'When I check with them to see if we are following all of the rules, they tell me to ask the legal advisers in our company.'

Ian de Witt, a partner in Tanner De Witt Solicitors, said the system needed improvement.

He said financial advisers in Hong Kong were not regulated effectively enough to protect average investors.

'You don't know which body is supervising which type of adviser. A lot of policies are supervised by both the SFC and the CIB. So what happens in that case?'

After representing Susan Field last year against Barber Asia, Mr De Witt has notable experience with the law as it relates to financial advisers. In that case 'the Hong Kong courts concluded and clarified a financial adviser's duty of care to investors. It was previously thought that so long as financial advisers complied with the regulatory rules that govern them, they would not be liable for losses an investor suffers in a fluctuating market. This is not the case,' Mr De Witt said.

For financial advisers throughout Hong Kong, that judgment must sound warning bells. So how do they stay on the right side of the law when advising clients?

Mr De Witt said: 'Financial advisers should be reviewing rules and adopting good practices. They should ensure that proper questions are asked so they know their clients. They should find out what the client's objectives are and properly record that the client fully understands what on earth they are talking about.'

He urged that they should try not to have a conflict of interest when advising on an investment. Perhaps the best suggestion is for financial advisers to put the interests of their clients before their own and act in a professional manner.

Mr De Witt offered a simple analogy with other professions to clarify the duty of financial advisers.

'When the public goes to a financial adviser they require expert advice, just as they would need expert advice from a doctor if they were sick or a lawyer if they had legal matters. In a sense, they are passing the responsibility on to an adviser and he or she is accepting that responsibility and is remunerated for it.

'Financial advisers cannot have it both ways - they cannot give advice and then not take responsibility for it.'

Though this may sound straightforward, apparently not all financial advisers in Hong Kong act dutifully.

'Some are doing this and some are not. I know many people who have lost money as a result of poor advice. Most of them have not taken it further because of the [legal] costs involved. It is a big problem in Hong Kong if even one person is receiving bad advice,' Mr De Witt said.

In the unfortunate event that clients lose money and then take the matter to court, they may discover other holes in the system, namely that independent financial advisers do not need to be insured nor do they need to disclose commissions.

The full impact of not having insurance affects the plaintiff most painfully after the courts award a sum that cannot be paid.

When asked why the SFC does not require institutions providing financial advice to be fully insured, an SFC spokesman said, 'The SFC has been studying the feasibility of professional indemnity insurance for financial advisers.'

And what about requiring advisers to disclose commissions?

The spokesman said the SFC intended 'to further study the issue about disclosure of commission rates received by independent advisers from product providers when selling financial products. We will continue to engage the market in the discussion on this topic.'

While the public waits for the system to change it can take some precautions to protect hard-earned money.

Mr De Witt said people should understand the limits of the SFC. It could not protect them or compensate them if they lost money because of poor advice. The SFC could only suspend the company from trading for three months.

Investors should also ask if the company had insurance and then look at the policy to see what it covered. Mr De Witt warned people to be careful about exempting advisers of liability or limiting their liability because that would lessen the chance of taking action against advisers.

He recommended that investors asked advisers to disclose their commissions, including secret income that might take the form of holidays.

That leaders in the financial planning industry such as Mr Wong at Convoy feel exasperated by the system will serve as a catalyst for change.

Mr De Witt said the system would probably change by the time he retired.