Tan Kin Lian's Blog: Fair Dealing Outcomes

Sunday, February 24, 2008

Fair Dealing Outcomes

I will be working with Dr. Money to submit our views to this MAS consultation paper:
http://www.mas.gov.sg/news_room/press_releases/2008/MAS_seeks_comments_on_Guidelines_on_Board_and_Senior_Management_Responsibility_for_Delivering_Fair_Dealing_Outcomes_to_Consumers.html

I invite suggestions for this paper.

9 comments:

Anonymous said...: I am glad that MAS has finally see the need to address 5 key areas in the interest of the consumers.
What i would like to see:
#1.currently the company and its advisers or representatives don't put clients' interest first. It appears the company and agents colluded to pilfer the customers by incentivising the agents with high commission to peddle their lousy and useless products.The companies don't bother how the products are sold. The companies only interested in sales.
example of lousy products are all money back or cashback or revosave, prime saver, prucash products etc.
#2 cashback products are never suitable to customers at large especially poor people yet they are sold and pushed to these people.
Mis-selling is another area that needs address. Examples of mis-selling; buy a revosave to fund a vivolife; buy a single ILP to fund a regular ILP. Today, mis-selling is so rampant becuase it creates double commissions to the agents. This a malpractice.
#3Currently the agents are not qualified enough even to advise on insurance let alone on investment products. There is great need to raise the entry qualifications higher, at least to a diploma level
for licensing.For investment, an even higher qualification and it should be treated as a separate license.Existing agents to be given time, about 1 year, to upgrade to new requirement, failing which they should leave the industry.
The general qualification should be at least an AFP or higher offered by FPAS or equivalent diploma in financial planning.
All advisers MUST use need based approach and make it compulsory.
Product selling must be banned.
All fact finding and recommendations must be vetted by a supervisor and he or she be made responsible and liable for negligence.
#4. This is the worse of the 5 .Currently agents don't disclose all info, what the product can and cannot do, and in fact add information to mislead and misrepresent the products.
#5.Customers always are not told of their right of '14 day free look' and the complaint mechanism at the start or at the end.Clients recieve no clear explanantion. They should be told to lodge their complaint to Fidrec if they should find the recommendation inappropriate or any misconduct.
I hope that MAS will look and accept what i have proposed so that the industry will have a level playing field.Malpractices are rampant and even blatant breaches of the FAA; February 24, 2008 11:08 PM
Anonymous said...: The guidelines should make sure both insurance companies and their representatives work together to meet the interest of the cleints.
I hope the remuneration system be
reviewed so that the agents are not driven by commission but by fee based on the quality and scope of advice.
Also that the advisory process should be need based and be mandatory on all transactions.
The clients should be informed of the recourse to legal action if there is professional misconduct.
Qualifications of the agents should be raised to a level of diploma. All agents to be give at least 6 months to upgrade if not face suspension until they clear the required exam; February 25, 2008 12:39 AM
Anonymous said...: In 2002, my brother who is illeterate and teochew speaking singed an investment plan with a well known bank. The then CEO was an "Ang Mo". He market investment product very agressively.

The trouble is my low-income brother did not know what is the risk involve? What he know is higher interest return according to the bank officer. He trust big bank. This is a typical case especally among the elderly and direct speaking group.
THIE ISSUE:
There is no effective communication. There is an agreement signed ! There is suffering of the consumer.; February 25, 2008 11:25 AM
Anonymous said...: We want to see the ceo and the senior managers take
responsibilities for the products and the agents' behaviour.
We hope products like cashbacks, guaranteed and complicated products like revosave , prucash, credit linked,and others will not be indiscriminately sold to poor and elderly customers.The ceo and managers and supervisors to bear responsibility for mis-selling and inappropriate advice by their agents.
We expect the agents to conduct need based selling and not product selling to eliminate
mis-selling,misrepresentations and other unethical means like 'churning' the product by buying another product. Lately this has been rampant and been disguised as 'buy one get one free".
We like to see the agents go back to class to upgrade thier knowledge
of insurance and other areas.The current standard is too low. Raising the the entry requirement is long overdue. The current standard of insurance advice is horrible.
We hope the MAS will take harsh and punitive measures to eradicate agents for misconduct and to have in place a simple platform for the aggrieved customers to seek legal help and redress for damages.
Most of all to make it must for all agents to disclose all information
that are known or ought to know to customers so that the customers can
make informed decision.
To avail the customers of the venues of complaint with telephone numbers and addresses.; February 25, 2008 6:55 PM
Anonymous said...: Propose FIDreC to provide a review service for consumers who want their insurance or investment checked for malpractice, mis-selling and other unethical practices like conflict of interest. This service is to be provided for a fee depending on the complexity of the review.
I believe this service will be popular because most consumers will surely want to know if they have been sold or recommended the right product and also of enough amount before it is too late.
Should malpractice be found Fidrec can direct the case for complaint or mediation or legal suit depending on the client.
This service will be boon to the industry by getting rid of the incompetent and dishonest agents.; February 25, 2008 11:26 PM
Anonymous said...: Roadshows and public solicitation
should be banned like in UK and US.
They are not only public nuisance but also a disgrace to the trade. Some behave like beggars, other behave like desperados and extortioners, harassing and forcing you to listen to their spiels. Their behavior reminds one of the prostitutes at geylang and the gypsies in Europe.
Also ban gifts and other giveaways to prevent distortion and abuse of the selling process.; February 26, 2008 9:15 AM
Anonymous said...: The commission to be reviewed and remuneration to be based on scope and complexity of advise. Maybe it is time to introduce fee and or with reduced commission and discounts as alternatives for cases with no need analysis.This will force the agents to provide need check and eventually to eliminate malpractice and mis-selling. This is to be self regulatory by insurers or companies
and they are made answerable in the event of complaint and legal suit.; February 26, 2008 11:42 AM
Anonymous said...: I was approached by an NTUC agents at a roadshow and was offered a package to buy a revosave and use the cashbacks to fund a limited premium living plan called vivolife. i feel this is miss selling and unethical. The unwary customers would been conned into this scam. The only person to benefit from this scheme is the insurance agent who will get 2 commissions.Who pays the 2 commissions? The sucker is the customer.
MAS should look into this and stop this miss selling by agents who 'packaged them like CDOs" and sell them as one without the customers realising another layer of cost.; February 26, 2008 12:22 PM
Anonymous said...: This is their current way to sell both plans. If you fall into this trap, you will pay a thick commission for both revosave and vivolife. The sales pitch is very powerful. Use the cashback from revosave to get a free insurance from vivolife! Be careful.

blackbox; February 27, 2008 9:57 PM