KNOWING when to buy or sell shares is difficult enough, but having made a decision, what can a small investor do when an order is not executed according to instructions? Brokers occasionally slip up. Does the investor have any right of redress? The answer depends on the brokerage.
According to Mr Gavin Greyhound, investment director of Connaught Investment Ltd, there are a few basic questions retail investors should ask before plunging into market activity with their broker.
''Although this scenario is fairly unusual, it does happen and there are steps to take to avoid confusion,'' Mr Greyhound said.
''Executing buy and sell transactions over the phone with your broker is technically a verbal contract, and that is always risky because it's one person's word against another's.
''So in order to avoid misunderstandings, investors should choose a brokerage firm that tapes all conversations between brokers and their clients.'' He said most large brokerages offered this service as an insurance to both the firm and the investor.
''Normally, these recorded telephone conversations show the initial time at which the call was made and are kept on file for about three months in the event there are any future discrepancies.'' He said that often, the recordings were made available to a ''compliance officer'', who reviewed the conversations looking for problems with transaction procedures.
''The compliance officer is there to ensure that brokers are doing the best possible job, following through with orders and working in their investors' best interest. As a broker, your first responsibility is to your client.'' Mr Greyhound said if the recorded conversation showed the broker did not act in his client's best interest, the investment firm should offer compensation for the client's loss.