Thursday, December 17, 2015

MAS Balanced Score Card

Here is the opening section of the MAS regulation on the Balanced Score Card. Frankly, I do not understand what it meant. I expect MAS to use simple and clear English in their guidelines, rather than confuse the public with this kind of language.

1 These Guidelines are issued pursuant to section 64 of the Financial Advisers Act (Cap. 110) [“FAA”]. They apply to all licensed financial advisers and exempt financial advisers, other than a financial adviser in respect of the activities, recommendations or transactions set out under regulation 34A of the Financial Advisers Regulations [“FAR”].

2 The Notice on Requirements for the Balanced Scorecard Framework and Independent Sales Audit Unit [FAA-Nxx] (“the Notice”) sets out the requirements for the Independent Sales Audit Unit and the design and operation of the balanced scorecard framework which financial advisers shall put in place in their remuneration structures for their representatives and supervisors. These Guidelines are intended to provide general guidance on some of the requirements in the Notice, such as the posttransaction checks and classification of infractions by the Independent Sales Audit Unit. In addition, these Guidelines set out the measures to be applied to existing and newly recruited representatives and supervisors who have been assigned a balanced scorecard grade E, as well as obtaining and sharing of information on the representatives’ and supervisors’ balanced scorecard grades during reference checks. The Guidelines also set out the Authority’s expectation for financial advisers to conduct pre-transaction checks to minimise the impact of the balanced scorecard framework on representatives and supervisors. The Authority may rely on a financial adviser’s failure to comply with these Guidelines to establish or negate any liability in question in relation to any proceeding under the Notice.

3 These Guidelines should be read in conjunction with the provisions of the FAA, the FAR, as well written directions, notices, codes and other guidelines that the Authority may issue from time to time.  


Anonymous said...

Come 2016, at least 50% of the insurance agents will have to leave.Why? As many as 95% of the insurance agents sales force is clueless and scared of the Balanced Score Card, because it is booby trap at every turn or the agents are walking on thin ice and at any moment they can crash and sink. Why is it so? because the agents are sales people and not advisors and therefore don't know the advisory process or they are incompetent and dishonest.
I hope 50% will be kicked out of the industry to protect the public. But wait a minute, the other 50% must not be trusted too. They too are incompetent and they too will eventually leave the industry because they will commit many offences/infractions and their license revoked by MAS.
BSC is good. It is agent cleansing time.

Anonymous said...

Totally wrong. BSC won't have much impact in reducing the number of agents. In fact it creates EXTRA costs to the system, ineffectively. Someone has to take up these costs, either the Insurance Companies pass them down to consumer via their products offering...or they have to reduce somewhat their nett profits. I suspect, the insurance companies will be inclined to pass these costs down....

The net effect of BSC is basically MORE time spend on documentations many of which are NOT important to consumers....They are more important to protect the agents....

This looks like a Wayang show to me....on one hand MAS seems to try to protect the consumers...but in actually fact, they are trying to save the agents from further problems in the future.

MAS can do a lot more to make sure consumers are educated in identifying which products are the better ones. Now, they are trying to asked commission-based agents to do that job. Is it not too naive to think that those agents will sacrifice their World-wide travel incentives and higher commissions???? No, they will find ways to make everything looks perfect (as required by BSC)...and yet consumers continue to suffer, getting lousy products.

BSC is a setback!

Anonymous said...

Yes , BSC will increase the cost and if the insurers pass the cost to the consumers their products will be rotten. No , to keep their products attractive the only way is to reduce the commission of the agents. If agents find the the trade no longer lucrative they will leave; if the agents find the BSC a big hassle they will leave. The truth is BSC is MAS 's means of getting rid of the agents. It is not easy to satisfy the BSC and there will be a lot of checks at various level of compliance and if the agents think they can circumvent by conspiring with supervisor , the internal compliance they cannot pass the MAS compliance. If it is found at this level there is 'complicity' by internal compliance it means the company is at risk. I am sure the internal compliance will not look over the shoddy and uncompliant work because it will affect the whole insurance company. It is better to sack the agent than to risk being fined and blacklisted by MAS.
There are already grouses and fear among the agents and some are seeking
This is the first and more to come.

Anonymous said...

It is good news that many agents will leave the indsutry next year, a relief not only for the consumers that these conmen are leaving but also for the government to solve the tight labour situation.
These insurance agents can now fill up the vacancies in all the indsutries from dishwasher, toilet cleaners, fastfood outlets to engineers and managers. This will slow the influx of foreign workers .

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