Investment consultants and portfolio managers have come under scrutiny by the Israel Securities Authority, which is examining 75 investment brokerage firms and portfolio management firms on indications they may not have acted properly. The inspection aims to verify the question of whether licensed investment consultants and portfolio managers fulfilled their obligation to adequately disclose and clarify their client's needs and requirements in the contractual agreement between the two parties as required by law. "The inspection is expected to lead to an improvement to upgrade the acceptable standards of conduct of investment consultants and portfolio managers," said Moshe Terry, chairman of the ISA. "The new financial environment opens larger business opportunities but at the same time puts more responsibility on the services of investment consultants." Analysts of various investment houses on Tuesday declined to comment on the investigation. The investment law is concerned that the potential investor be given enough information about the risks of investing in a particular company. Investors, therefore, need protection from companies that deceive them into investing in ventures that really have no future. "Portfolio managers have an obligation at all times to provide full, cautious and impartial information to their clients, while refraining from any differential treatment," said Terry. Before making investment recommendations, brokers are obligated by law to learn their client's level of investment sophistication, investment experience, investment objectives, net worth, and financial needs. Based on that information, the broker or advisor has an obligation to make only those investment recommendations that are suitable for that particular investor based on his or her investment profile. As such, investment consultants are required to provide accurate information about the investments they recommend to their investment customers, including the risks and benefits of the investment. The ISA visited 19 investment brokerage firms and 56 portfolio management firms and will examine their services against clients interviews. The results of the inspection are expected to be published in December.