Here are the changes to the legislation on financial services in Australia. Payment of commisison to financial advisers will be banned, to ensure that they put the interest of their clients at the forefront.
Australia in 01/07/2012, UK in 2013, when is Singapore? maybe in 2020 just like the CEDLI introduced in 2001 but never implemented and enforced. Between 2001 and now have you any idea how many consumers got conned and how much has been lost by the insurance agents and RMs? If CEDLI was enforced do you think the minibond could have happened? You can see there is no real desire to help and protect the consumers. WallStreet? Shenton Way? same same
This is in a way very good if only our regulator 'wake up' and know what the FA Firms are doing here. They themselves as regulator does not know what's gong on and 'take' advise from so called some FA Firms who have insurance mentality and care only about 'money' and not having FA mentality. Should singapore implement what Australia does, the reps will suffer, FA firm will definitely take a huge pie from them. The Reps will not be protected.
Commission is one thing but another thing that could have curbed malpractices is making need based approach compulsory.This was NEVER done. The regulator only paid lip service when CEDLI was introduced in 2001 as mentioned by one poster. So introducing guidelines to protect consumers must also come with enforcement in order for rules to work but MAS has been lackadaisical. If need based was enforced and insurance agents made to responsible for recommendation of products on reasonable basis I don't think there will be any outcry over the the practices of insurance agents and minibond fiasco would have been prevented. Product pushing is very dangerous and very often the customers get sold rubbish and inferior products which don't meet their goals and needs and these rubbish products only are found out many years down the road. This is too late. Time is already lost. The policyholders are put in dilemma , to terminate or to keep and either way sure die. MAS must have some safeguards to prevent this, eg. full refund of premium paid plus interest rate of minimum equal to inflation of 3%. This will force the insurers to be mindful of the interest of their clients and the insurance agents who committed this misconduct sacked. These are measures to ensure best practice if MAS is serious about keeping the industry clean, free from charlatans and rogue insurers. 2 areas to tweak. The commission to be removed and need based to be enforced according to section 27 of the FAA. The poor will benefit from these changes because they make up at least 90% of any insurance agents' clientele.They will get best advice at low cost and no more squandering of their hard earned funds by insurance agents.
Before MAS do anything as drastic as this, it will call a meeting with all the heads: DBS, UOB, OCBC, HSBC, Citi, etc, to ask them what they think about it.
What do you think they would say? They will tell MAS to go fly kite. If MAS do that, they will move the business to HK or China or India. So MAS bopian, will probably just reiterate the financial advisor act and incorporate a more stringent process of accepting new clients but it will not ban commissions.
The saddest thing is the poor are the victims of insurance agents. Becuase of their ignorance they are dumped insurance products that they cannot keep up and eventaully lapsed or terminated and worse they never got their needs addressed.They cannot afford to waste money yet they are the ones who always waste or lose money. The law must change to protect them. The law must ensure these poor people get best advice and value for money. How to help them is through a sincere, competent and honest need approach to maximise the benefits.The protection must cost them little and yet adequate and the return at the highest at the lowest risk. Possible? Yes!!!only with competent and honest advisers but not with insurance agents, salesmen or women or conmen and conwomen disguised as financial consultants. These cheats must be punished and eliminated. I am shocked that poor people are sold $10K or $20K wholelife or anticipated endowment with very low coverage and which premium can get them 20 times coverage and this is what they need and that is insurance. So removing commission from insurance products is long very long overdue. MAS must not dilly dally again and quickly get into the act.
MAS would not protect the consumer, as if the FIs move out of Singapore, we would lose our financial status position, and the high hierachial level staff like the Chairman, Dy Chairman and the MD of MAS would not be able to command high pay, or worst still, would be out of a job. Or the OL and AL educational level of Singaporeans would be out of jobs as insurance agents or brokers. So fat hope of copying Australia or the UK, as the job is too messy for MAS to copy.
"Customers and clients when they're seeing a financial planner deserve to know that a financial planner is acting in their best interest and when you have commissions that is simply impossible." Thousands of Australians have their life saving wiped out by inappropriate advice", says the financial services minister, chris bowen..
Our minister here will say 'you didn't open your eyes big big' , therefore you deserve to lose your life saving. Ok, we will 'educate all of you' so that you become savvy and you can buy financial products on caveat emptor basis. Indirectly, telling the insurance agents to push products and no need analysis is required becuase the consumers are savvy and they know what is the right product for them. But then, if every decision is our decision and since we know the products why are we paying the insurance agents for just filling up the forms and for submitting our application? Is that what MAS wants? sales sales and sales and not advice ?
If MAS is not promoting sales why every year every insurance company shows off the number of insurance agents the best conmen and women in the paper? What do these conmen do for their customers? How did they earn to be in the picture? You mean they pay to be in the picture.Of course not. They are in the picture because they squeezed the most commission out of their customers. Their customers need to keep for first year and can lapse for all the agents care after that.The insurance agents already earned 50% of the premium for the conjob, lying and the untruth . It is not difficult to con customers becuase the they don't know how much they pay in commission.It is because the customers are dumb. MAS need to protect these dumb customers and there a lot of them, as many as 99.9% are dumb.
It is unfortunate that poor are the receiving end of poor advice from insurance agents.People must wake up that insurance agents are not qualified financial advisers but salesmen disguised as consultants. MAS must regulate to stop them from masquerading as financial consultants to mislead consumers.Some of them even have the prefix of 'executive' before their title. What does that mean? You only realise that they sound more AhBeng or AhLian when they talk and they certainly are not qualified consultants. They are the typical door to door salesmen or saleswomen who knock on your door to sell icecream or some magic pot and pans during the afternoon when they know only old folks are in.The old folks are easier to CONvince and to part with their money. MAS must stop the commission. It is turning decent people into devils and monsters. You can see them in business suits in pictures in the ST but beneath those suits lurk an evil man or woman who has no qualms even to con own siblings or relatives and friends.What more the man in the street stand a chance of not being cheated. MAS, you must protect these unwary innocent consumers before their hard earned life saving get wiped out by these monsters.
MAS is doing its job by providing financial education through MoneySense. People cannot be spoonfed all the time and the market forces will be the best indicator what is needed in the industry.
How about telling MAS to increase the interest rates of the bank since it is giving poor returns on the money put in?
What is MoneySense? You mean it can turn someone into a savvy professional?Don't be naive. The so called professionals or practitioners like insurance agents don't even understand what they are doing and that is why they peddle products.How would the consumers understand in just a short immersion on the subject? There is no way that MoneySense can make an expert out of you. It only at best creates awareness.So please, don't echo and pretend that you are savvy. Insurance agents and RMs are PAID to give best advice and put the clients' interest first. It is their job to see the products meet the needs at the LOWEST cost and adequately. Reason why commission creates conflict of interest becuase the recommendation is motivated by the commission rather than the needs of the consumers.That is wrong. That is why commission got to go. It is not only here in Singapore but also in UK , Australia , US etc.
Anon,April 28, 2010 6:14 PM, do you know what is a EFP and how to construct one, since you say MoneySEnse taught you how to? This is the job of an investment adviser and NOT a salesman. Insurance agent is a salesman. If they don't know , don't you think you are a sucker to pay him commission? Everybody is paying but get nothing in return.Real conjob. It has to go. Commission has to go. It is unfair to consumers to pay for nothing.
Insurance agents are like witch doctors who prescribe cure all snakeoil products like wholelfie and endowment. Or they are like a nurse disguised as doctor. or wolves in sheep's clothing.
Definitely something in the Right direction.
ReplyDeleteThat's fair dinkum for the Aussies.
ReplyDeleteBut you can expect more of those Oz FA firms to try their luck in Singapore, coz we operate on caveat emptor aka open your eyes big big.
In singapore it is business first and consumers last.
Australia in 01/07/2012, UK in 2013, when is Singapore?
ReplyDeletemaybe in 2020 just like the CEDLI introduced in 2001 but never implemented and enforced.
Between 2001 and now have you any idea how many consumers got conned and how much has been lost by the insurance agents and RMs?
If CEDLI was enforced do you think the minibond could have happened?
You can see there is no real desire to help and protect the consumers. WallStreet? Shenton Way?
same same
This is in a way very good if only our regulator 'wake up' and know what the FA Firms are doing here. They themselves as regulator does not know what's gong on and 'take' advise from so called some FA Firms who have insurance mentality and care only about 'money' and not having FA mentality. Should singapore implement what Australia does, the reps will suffer, FA firm will definitely take a huge pie from them. The Reps will not be protected.
ReplyDeleteCommission is one thing but another thing that could have curbed malpractices is making need based approach compulsory.This was NEVER done. The regulator only paid lip service when CEDLI was introduced in 2001 as mentioned by one poster. So introducing guidelines to protect consumers must also come with enforcement in order for rules to work but MAS has been lackadaisical.
ReplyDeleteIf need based was enforced and insurance agents made to responsible for recommendation of products on reasonable basis I don't think there will be any outcry over the the practices of insurance agents and minibond fiasco would have been prevented.
Product pushing is very dangerous and very often the customers get sold rubbish and inferior products which don't meet their goals and needs and these rubbish products only are found out many years down the road. This is too late. Time is already lost. The policyholders are put in dilemma , to terminate or to keep and either way sure die.
MAS must have some safeguards to prevent this, eg. full refund of premium paid plus interest rate of minimum equal to inflation of 3%.
This will force the insurers to be mindful of the interest of their clients and the insurance agents who committed this misconduct sacked.
These are measures to ensure best practice if MAS is serious about keeping the industry clean, free from charlatans and rogue insurers.
2 areas to tweak. The commission to be removed and need based to be enforced according to section 27 of the FAA.
The poor will benefit from these changes because they make up at least 90% of any insurance agents' clientele.They will get best advice at low cost and no more squandering of their hard earned funds by insurance agents.
The Watchman
Unlikely to happen here.
ReplyDeleteBefore MAS do anything as drastic as this, it will call a meeting with all the heads: DBS, UOB, OCBC, HSBC, Citi, etc, to ask them what they think about it.
What do you think they would say? They will tell MAS to go fly kite. If MAS do that, they will move the business to HK or China or India. So MAS bopian, will probably just reiterate the financial advisor act and incorporate a more stringent process of accepting new clients but it will not ban commissions.
The saddest thing is the poor are the victims of insurance agents.
ReplyDeleteBecuase of their ignorance they are dumped insurance products that they cannot keep up and eventaully lapsed or terminated and worse they never got their needs addressed.They cannot afford to waste money yet they
are the ones who always waste or lose money.
The law must change to protect them. The law must ensure these poor people get best advice and value for money. How to help them is through a sincere, competent and honest need approach to maximise the benefits.The protection must cost them little and yet adequate and the return at the highest at the lowest risk. Possible? Yes!!!only with competent and honest advisers but not with insurance agents, salesmen or women or conmen and conwomen disguised as financial consultants. These cheats must be punished and eliminated.
I am shocked that poor people are sold $10K or $20K wholelife or anticipated endowment with very low coverage and which premium can get them 20 times coverage and this is what they need and that is insurance.
So removing commission from insurance products is long very long overdue. MAS must not dilly dally again and quickly get into the act.
MAS would not protect the consumer, as if the FIs move out of Singapore, we would lose our financial status position, and the high hierachial level staff like the Chairman, Dy Chairman and the MD of MAS would not be able to command high pay, or worst still, would be out of a job.
ReplyDeleteOr the OL and AL educational level of Singaporeans would be out of jobs as insurance agents or brokers.
So fat hope of copying Australia or the UK, as the job is too messy for MAS to copy.
"Customers and clients when they're seeing a financial planner deserve to know that a financial planner is acting in their best interest and when you have commissions that is simply impossible."
ReplyDeleteThousands of Australians have their life saving wiped out by inappropriate advice", says the financial services minister, chris bowen..
Our minister here will say 'you didn't open your eyes big big' , therefore you deserve to lose your life saving.
Ok, we will 'educate all of you' so that you become savvy and you can buy financial products on caveat emptor basis.
Indirectly, telling the insurance agents to push products and no need analysis is required becuase the consumers are savvy and they know what is the right product for them.
But then, if every decision is our decision and since we know the products why are we paying the insurance agents for just filling up the forms and for submitting our application?
Is that what MAS wants? sales sales and sales and not advice ?
If MAS is not promoting sales why every year every insurance company shows off the number of insurance agents the best conmen and women in the paper? What do these conmen do for their customers? How did they earn to be in the picture? You mean they pay to be in the picture.Of course not. They are in the picture because they squeezed the most commission out of their customers. Their customers need to keep for first year and can lapse for all the agents care after that.The insurance agents already earned 50% of the premium for the conjob, lying and the untruth .
ReplyDeleteIt is not difficult to con customers becuase the they don't know how much they pay in commission.It is because the customers are dumb.
MAS need to protect these dumb customers and there a lot of them, as many as 99.9% are dumb.
It is unfortunate that poor are the receiving end of poor advice from insurance agents.People must wake up that insurance agents are not qualified financial advisers but salesmen disguised as consultants.
ReplyDeleteMAS must regulate to stop them from masquerading as financial consultants to mislead consumers.Some of them even have the prefix of 'executive' before their title. What does that mean? You only realise that they sound more AhBeng or AhLian when they talk and they certainly are not qualified consultants. They are the typical door to door salesmen or saleswomen who knock on your door to sell icecream or some magic pot and pans during the afternoon when they know only old folks are in.The old folks are easier to CONvince and to part with their money.
MAS must stop the commission. It is turning decent people into devils and monsters. You can see them in business suits in pictures in the ST but beneath those suits lurk an evil man or woman who has no qualms even to con own siblings or relatives and friends.What more the man in the street stand a chance of not being cheated.
MAS, you must protect these unwary innocent consumers before their hard earned life saving get wiped out by these monsters.
MAS is doing its job by providing financial education through MoneySense. People cannot be spoonfed all the time and the market forces will be the best indicator what is needed in the industry.
ReplyDeleteHow about telling MAS to increase the interest rates of the bank since it is giving poor returns on the money put in?
What is MoneySense? You mean it can turn someone into a savvy professional?Don't be naive. The so called professionals or practitioners like insurance agents don't even understand what they are doing and that is why they peddle products.How would the consumers understand in just a short immersion on the subject? There is no way that MoneySense can make an expert out of you. It only at best creates awareness.So please, don't echo and pretend that you are savvy. Insurance agents and RMs are PAID to give best advice and put the clients' interest first. It is their job to see the products meet the needs at the LOWEST cost and adequately.
ReplyDeleteReason why commission creates conflict of interest becuase the recommendation is motivated by the commission rather than the needs of the consumers.That is wrong. That is why commission got to go. It is not only here in Singapore but also in UK , Australia , US etc.
Anon,April 28, 2010 6:14 PM,
do you know what is a EFP and how to construct one, since you say MoneySEnse taught you how to? This is the job of an investment adviser and NOT a salesman. Insurance agent is a salesman. If they don't know , don't you think you are a sucker to pay him commission? Everybody is paying but get nothing in return.Real conjob. It has to go. Commission has to go. It is unfair to consumers to pay for nothing.
Insurance agents are like witch doctors who prescribe cure all snakeoil products like wholelfie and endowment.
ReplyDeleteOr
they are like a nurse disguised as doctor.
or
wolves in sheep's clothing.