Monday, September 03, 2007

Licencing of financial advisers

COMMENT POSTED IN MY BLOG (edited)

Dear Mr Tan,

In your opinion, is there a need for MAS to license insurance agents? For those IFAs operating in a licensed financial firm, why do they need a license individually to practice?

I feel that MAS is trying to distinguish these 2 groups of advisers but doing it slowly over time. I do hope the licensing requirements (including renewals) do help to weed out unethical advisers.

Also, i feel that there is a conflict of interest in the insurance companies trying to enforce compliance issues on their representatives and watching their bottomline.

I share your vision where advisers operate in a fee-based model and salaried advisers. Free of commissions and conflict of interests.

REPLY:

My view is:

* There is a need for MAS to licence insurance agents, and not leave it to the insurance company. Currently, MAS licence independent financial advisers only.

* There should be clear standards of products and practices that are fair for consumers. Currently, some financial products are designed to make a lot of commission for the distributor and the product issuer (i.e. the insurance company or investment bank), and give poor value to consumers (who are not knowledgeable).

* There should be stronger enforcement of the practices, to make sure that the financial advisers and act in the interest of the consumers (which is their duty anyway).

* We need standards similar to the medical and legal professions.
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1 comment:

Anonymous said...

From the grapevine, I heard licensing tied insurance agents is in the pipe line.
It is unfair that FAs are subject to stringent licensing regime and tied agents are not.Therefore to level the playing field insurance agents will have to be licensed and subject to yearly renewal.
Also comes together with it will be a register of advisers.The public can access to check if the advisers have any black record like mis-selling, misrepresentation, concealing of facts or complains and so forth.
This will be a boon to the consumers.
If consumers wish to engage a qualified financial adviser there is a body/association which maintains a register of its members with CFP qualification. You can access www.fpas.org.sg to look for a planner.Although there is no guarantee that you get best advice but you are assured and guaranteed that any misconduct by members will be subject to strict disciplinary action and if the misconduct is serious he or she may be fined heavily or struck off the register. There is a provision in the website for complain against its members.

September 03, 2007 9:43 PM

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