Tan Kin Lian's Blog: Survey: MAS guide on treating customers fairly

Saturday, April 04, 2009

Survey: MAS guide on treating customers fairly

MAS has issued a new guide to banks on treating customers fairly. The yardsticks are:

1. Customers have confidence that they deal with financial institutions where fair dealing is central to the corporate culture

2. Financial institutions offer products and services suitable for their target customer segments.

3. Financial institutions have competent representatives providing customers with quality advice and appropriate recommendation.

4. Customers receive clear, relevant and timely information to make informed decisions.

5. Financial institutions handle customer complaints in an independent, effective and prompt manner.

What are your views on the existing situation and the new MAS guide? Survey.

3 comments:

Concerned said...: One very important feature should be highlighted. Those counter-staff (clerks), must have no hands in directing/advising customers to purchase any investment products. These self-professed experts of investment products should be restricted to their role as tellers and nothing else. If they want to sell financial products, then they should get out of their teller roles and becomes relationship managers, be properly trained, knowledgable and take their duties and responsibilities seriously.; April 04, 2009 7:03 PM
David said...: When you want to practise as a lawyer, doctor, architect, certified accountant or professional engineer, there are strict rules on educational qualifications, experience and even exams to be passed, all governed by laws and a professional board. Otherwise you are breaking the law and can be prosecuted.

Not so with financial advisers, property agents, insurance agents, wealth manager, relationship managers etc. In fact the terms and educational qualifications expected of these professions may not even be clear. Maybe it is difficult or impractical to enforce clear rules on these areas!

Hence despite the recent financial fiasco on many ordinary folks, MAS can only issue general guidelines only on how banks, through such "professionals", deal with the public. Nothing specific as to indicate whether even tellers can perform the above. They cannot enforce anything! Correct me if I am wrong.; April 05, 2009 5:31 PM
zhummmeng said...: 1.When MAS advised a remuneration structure to encourage acheivement of fair dealing it might be misconstrued by insurance companies to mean achieving more sales, to boost sales and more consumers conned.
2.Robust due diligence procedures to select suitable products could also mean products best reward the agents.
3.Customers with limited knowledge always conned into opting product advice option without their knowing it. They have no idea of their right.
4. What is complex product? Isn't insurance products complex? Isn't whole life , endowment and anticipated products come under this group?
My definition of complex product is as long customers are clueless about how they work for them is considered complex.How many people really know them in details.Many know them as a product that protects them for wholelife and has a saving element.But WL is supposed to do more than that.
A fact find is a must to check if the product suits them, their affordability, adequacy of coverage, decent return and cost.
5.MAS must be informed that insurance agents sell wholelife products and endowment as if they are suitable for all ailments.
6.Today there are insurance companies which offer gifts such shopping vouchers to entice the consumers to distort their buying decision.
7.Supervisors of insurance agents are not qualified and because of vested interest like over riding commission they always close their eyes to unethical practices. Therefore they must be made jointly liable for any misconduct of the agents under their charge.
So , is there zero tolerance? NO!!
8.If there is no change to commission as remuneration it will lead to product pushing, unethical practices such as using of the 5Cs will continue to be the industry best practice standards.(the 5Cs are convince, confuse,con, cheat and cuzon)
9.Whistle blowers(WB) must be protected and commended. This should be encouraged and made known to potential WB that it is to interest that company's policies are consumers oriented and best dealing outcome should be the culture. It must be empahsised that WBs are NOT traitors but friends of policyholders.
10.MAS must not pay lip service to the guidelines but enforce without conflict of interest, without fear.
11. MDRT and COt or TOT objectives run counter to fair dealing outcome to consumers as they encourage unethical practices to achieve these dubious awards. As they are commission based production will skew towards pushing products with high commission to the detriment of consumers financial well being.
MAS should discourage them as they are obsolete and a threat to the interest of consumers.
12.Misuse and misrepresentation of titles. Many insurance salesmen have titles that confuse and misrepresent their work and service. Titles like financial consultants, wealth managers, life planners have been abused. These people do not have knowledge and qualifications to befit these titles. MAS should regulate and warn their misuse by insurance companies.
13.All insurance salesmen must be licensed . To qualify they must meet the fit and proper criteria of the FAA. They must be honest and competent and NOT sincere and trustworthy as self proclaimed. They must be told buying gifts to bribe policyholders or helping with claims or to be with their policyholders while in hospital are services expected of them but NOT criteria of fit and proper.
These agents must be clear that these services are NO substitutes for Honesty and Competence.
14.MAS must clarify the definition of FIs, who are they, and the scope and who are the financial advisers and representatives as referred to in the guidelines.This will help to remove all ambiguouties; April 05, 2009 10:33 PM