Regulation of financial products

VIEW POSTED IN MY BLOG

There are two sides of a coin and it's not always fair to say that this company or product or agent is bad or good without considering the context where the event took place.

By the way, since MAS is the regulatory body, if such practices are not condoned, how come never shut them down?

MY REPLY:

For the past five years or more, the regulator (i.e. MAS) has taken the approach that the product issuer is required to disclose certain specific details of the product. Each consumer should take his or her own financial decision.

This has led to the following situation:

1. Many financial institutions design products that offer poor value to the consumer.
2. The life insurance or structured product is disclosed in a document that cover 30 to 100 pages.
3. The document is difficult to understand, even for an expert.
4. The agent who markets the product makes a verbal summary that is different from the written document. The customer is misled, but does not have any evidence.

Many consumers invested billions of dollars in these types of products that make huge profits to the distributors and issuers, but give a poor return to the consumer. My friend said that ten of thousands consumers have been "taken for a ride".

I hope that the regulator will review its approach and ensure that the financial products are fair to consumers. It is difficult for a lay person to be able to look through the complex product and know about its drawbacks.

On my part, I will do my best to educate the consumers, by writing in this blog. .