Beware of unscrupulous financial advisers
Individuals put a lot of faith in financial advisers, making them vulnerable to fraud. But you can protect yourself, writes Nicky Burridge
City University professor Lindsay Miller was left with a HK$1.75 million loss after his adviser lied about where she had invested his money.
Pauline Cousins, the former managing director of Crown Asset Management, claimed she had invested the lump sum in an investment-linked assurance scheme, even producing statements belonging to other clients to show how the investment was doing.
But in reality, without Miller knowing, she had used the money to buy shares in a hi-tech company that was subsequently put into administration.
Cousins was convicted in 2009 in the District Court of four counts of furnishing false information and sentenced to 21 months in prison.
Such are the all-too-common tales of financial advisers taking advantage of Hongkongers' trust, and taking their money. The matter leaves investors with a dilemma. Many people want to invest, and they want independent advice. They may not want to rely on bank staff or insurance agents for advice, as they are selling products and may be thinking mainly of their performance targets or commission.
So they turn to financial advisers, but then they have to worry about fraud and embezzlement.
Advisers are often empowered to invest for clients and move money on their behalf. Any adviser with a speck of creativity and the will to commit wrongdoing can siphon cash from investors' accounts.