Don't let too many fingers into your pie

LARGE stockbrokers have been inundated with queries over the past week, as worried investors sought advice from the established firms in an effort to safeguard their assets.

However, even if people choose not to switch their money, they should be aware of how best to protect themselves and how to watch out for likely fraudsters.

Experts say the following guidelines should help deter all but the most determined fraudster.

. If it sounds too good it probably isn't - remember there is no gain without risk

. Double check anything which looks like it is offering over the prevailing rates

. Never give your broker discretion over your funds

. Always make cheques payable to institutions, be as specific as possible, even indicating the name of account

. Ensure that you hold the policy or share document, not your broker, if possible

. Check the agency agreement between the broker and the institution.

Mr Barry Ross, of Dublin broker Ross Barry & Associates, warns bat it is easy for a broker to turn her accounts and justify the decision on having to go into new markets. "I believe the client should sign and authorise all investment decisions," he says.

A Goodbody stockbroker also warns that investors must be wary of high returns. "If someone is offering you a 20 per cent return on a tracker bond, you've got to ask yourself what is the level of risk?

"People have been well warned with Mr Mark Synott and now Mr Tony Taylor."

Another problem is that some people try to invest their money offshore, without attracting the Revenue's attention. Stockbrokers warn that you always expose yourself slightly by hiding money offshore, because the big institutions must inform the Revenue of accounts set up offshore.

"The only real safe hope is to find a friendly country bank manager," quipped one broker.

Following a similar case in Britain when a financial intermediary Mr Roger Levitt absconded with investors' cash, British financial experts devised a list of characteristics which are common to most major fraudsters.

. fraudsters tend to be compulsive people, often alcoholic or chronic gamblers

. they tend to have split up from their first wives

. they tend to be bullies

. they tend to flash money around.

The really determined fraudster will still manage to con the most wary investor. There seems to be little reason why financial advisers, who, after all, often control a client's entire savings, do not have a compensation fund.

Solicitors have such a fund and they rarely hold all of somebody's life savings. For example, their compensation fund received 68 claims last year and paid out £1.6 million.

Even some smaller brokers agree that a compensation fund is now necessary, although it will probably take more to change the minds of some of the bigger stockbrokers who typically question why they should pay to prop up the smaller independent sector. As one pointed out: "Why should we be asked to subsidise the smaller brokers. The client has a choice where he wants to go."