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.