The prospect of more investors and savers losing their funds to unscrupulous investment brokers will continue so long as people keep handing over cash to the middleman and not to the institution to which their money is destined.

The latest saga, which involves a Limerick mortgage broker and £300,000 in missing funds, could have been avoided if the prospective homebuyers and savers had paid over their deposits or other payments directly to the mortgage lender, insurance company or fund manager and received in turn, the appropriate official receipt. The broker should have been used strictly as a middleman, his payment being a commission or fee either from the institution or the client.

By handing over cash directly, clients are putting their funds at risk, regardless of the claims of broker's representative bodies who insist that their members are properly bonded and vetted and adhere strictly to regulations concerning the holding of Section 47 accounts.

The person at the centre of this latest case was not a member of either of the broker organisations, but the infamous Tony Taylor was one of the most prominent members of the IBA and he clearly circumvented all the rules and codes of practice.

Bonding and so-called broker compensation schemes are clearly inadequate; the latter notoriously so because they are aimed at compensating the financial institution that is defrauded and not the consumer directly.

Unlike Britain where genuine compensation - and policing - schemes exist, the only effective way here at the moment for a client to recoup stolen funds (that have not been properly receipted and acknowledged by an insurer, for example) is to pursue a costly court action against the broker.

Under the Consumer Credit Act, mortgage brokers must now be approved and licensed by the Office of the Director of Consumer Affairs (ODCA), which was in the process of investigating the Limerick mortgage broker when the company was closed. He was not registered with the Director's Office.

Anyone engaging a mortgage broker should always:

a) ensure that they are licensed by the ODCA;

b) pay any deposits or other payments directly to the lender and not to the broker;

c) inquire about any "finders fees" or commissions payable to the broker from the lender.

If the broker is receiving a payment from the lender for passing on your business he should not also be charging you a separate one.

Mortgage brokers can also arrange mortgage protection and home and contents insurance, all of which carry commission payments.

One client of the Limerick broker - she handed over £3,000 in cash as a deposit for a home mortgage - said she was told he could arrange the loan "without having to do any paperwork".

There is no such thing as arranging any loan, especially a sizeable mortgage, without plenty of paperwork. And so it should be to protect both you and the lender. Any broker or financial adviser who offers to take all the hassle away from loan or investment transactions is being disingenuous at the very least, and may be dishonest as well.

Buying a house, taking out a pension, or saving for your children's education is an expensive and serious business and deserves your time and attention. Don't let anyone con you into thinking it is an easy, or even painless, process.

If you need financial advice, be prepared to pay for it, in the same way you pay for medical or legal advice.

There are an increasing number of mainly fee-based financial advisers on the market who will charge you according to their own expertise and the time they spend advising you. Check out their reputations before hiring them: don't be afraid to ask about their professional credentials and references.

Commission-driven brokers may also be well-qualified and experienced, but their first priority is the reward they earn from the sale of savings and investment products, not whether you received the most appropriate advice.

In too many cases giving you the best advice, such as depositing your money in a non-commission bank account or the Post Office, means forfeiting a fat commission payable if the same funds were routed into a life assurance or investment fund.