Another small local brokerage failed last Friday, increasing pressure on the Securities and Futures Commission to regulate the industry further. Last week's failure followed the collapse of three securities firms last year. If you delve into the details behind the demise of these brokers, the real pressing need seems to be not stricter regulation but more investor education. In the most recent case, police arrested a 61-year-old stock broker at Man Lung Hong Securities following allegations that he had stolen HK$20 million from 28 clients. Police said that the man had worked for the same securities firm for 17 years, during which time he had amassed several hundred loyal clients who gave him cash to invest instead of sending cheques to the company. The SFC always reminds investors not to give cash to their brokers, but some tempt fate by putting that hard-earned money right into their hands. The commission has banned Man Lung Hong from trading, amid allegations that the management may have had its suspicions about the malpractice for some time but failed to make a report. The broker, identified as Mr Yip, was reportedly a key trader, with more than 400 clients. That represented more than half the firm's 750 active cash clients. Friendships between local brokers and their clients may stretch over years, easily blinding investors to signs they are being ripped off. Both the stock exchange and the SFC have in recent years called for retail investors to open their own accounts in the clearing house, instead of depositing shares through accounts at their stockbrokers. This will ensure that brokers cannot gain easy control of their shares. However, only a fraction of investors have chosen to set up their own accounts, the reason being that for active traders, it is troublesome to confirm the transfer of shares from the clearing system. Between convenience and safety, it is obvious many Hong Kong investors are choosing the former. That's a recipe for burned fingers. Private banker and counsellor It has not been an easy summer for investment specialists, with global stock markets suffering extreme volatility as a result of the United States subprime mortgage crisis. This week's podcast and video guest is Timothy Lo, managing director of CIC Investor Service, who shares his experiences of the roller-coaster ride. 'I have become a psychiatrist instead of a private banker in the past two weeks as I have to spend a lot of time comforting clients who have lost money in the market,' Mr Lo said. 'I think the crisis is somewhat more difficult than the 1987 market crisis or the 1997 Asian financial crisis. The two previous crises went in only one direction - down. But last month there were swings up and down.' Mr Lo has been a banker for 20 years and worked at some of the biggest names in the business, including BNP Paribas, Wardley, HSBC Private Bank and Chase Manhattan. Since joining CIC Investor Services in 2004, he has been overseeing the French bank's Hong Kong unit that specialises in services for high net-worth clients. A speedy recovery Legislator for the financial services sector Chim Pui-chung has completed his treatment for cancer. Mr Chim is now undertaking a course of Chinese medicine to help speed up the recovery process. 'I think I will be back at work in Legco next month without problems,' he said. 'Thanks for everybody who sent in flowers and fruit but please stop sending more. Under doctor's order, I can't have any fruit so I can't enjoy any of the goodies from all those baskets.' Incoming HKSA president The Hong Kong Stockbrokers Association has a new chairman - Kenny Lee, chief executive of International Financial Network Holdings. He replaces Tony Espina, who will step down after heading the brokerage body for two years. Mr Lee, a former accountant at Ernst & Young, joined the brokerage industry in 1988 and has worked at a number of firms including Cheerful Securities, now renamed CASH, and NSC. He joined GEM-listed International Financial Network Holdings in 2000. In esteemed company New York Life has 531 Asian agents who have qualified for the Million Dollar Round Table. MDRT is an international association, representing 35,781 of the world's best life insurance and financial services professionals from 76 nations and territories. Don't be fooled by the name. It does not measure the amount of premiums an agent sells but professional knowledge, strict ethical conduct and outstanding client service.