Mr Leong Kok Seng noted that more regulations could mean the loss of good investment opportunities ("Regulations should protect investors, yet offer flexibility"; last Thursday).

This situation could result if regulators do not fully understand risk management and investment.

For example, I have found that most investment experts do not understand the risk tolerance level nor appreciate the real needs of retirees because they have not personally reached that life stage.

Retirees with a sufficient nest egg but without big excesses should have a zero-risk tolerance level. This will mean no investment product can be sold to retirees.

However, with the silver generation growing in the population, those who sell financial products cannot avoid selling to this group of people.

One of the underlying problems is the lack of investor education - the subject is not taught at secondary or tertiary level.

A real investment course costs as much as a degree course, and few of the graduates are willing to serve as salesmen for financial products.

Even then, learning a subject and passing an examination does not make one an "expert".

When a new product is introduced by a front-line salesman or financial adviser, the key message is how good and unique the product is.

The risk declaration is in the small print and worded in legal jargon, such that even the financial advisers do not fully understand it. How do we expect these to be explained to investors with varied risk tolerances?

Regulations will not stop an investor from losing all his money if he wants to take unnecessary risks.

But if the regulator is well versed with investment risks, then the chances are that additional regulations would serve to protect investors without the loss of good investment opportunities.

Geoffrey Kung Kuo-Woo