FAIR panel has struck the right balance

22 January 2013

Editor, Forum Page

Straits Times.

I refer to the letter from Ms Maybel Tang "Look after financial advisers' interest as well, ST ....".

I commend the Financial Advisory Review Panel for striking the right balance between 

the interest of consumers and financial advisers and for setting the right direction for the future.

Ms Tang is worried that the direct channel will take away a large part of the business of financial 

advisers. Past experience has shown that this channel will only attract a segment of the population

who are self educated. The channel will probably offer only the basic insurance products that the financial

advisers are not interested to market, due to the low commission. 

The financial advisers can continue to sell the more complete insurance packages that are 

created to meet the more sophisticated needs of consumers.These packages require the expertise

of the financial advisers to find the right match for the consumer.

Ms Tang is worried that the capping of commission will reduce the supply of new entrants

to market life insurance products. This may be a desirable outcome as more entrants are 

needed for other sectors of the economy. We should not have a lop-sided concentration of

our young people in the financial services and property sectors. 

Consumers are willing to pay an fair fee for financial advice. After all, they now 

pay a fee for medical and legal advice that suit their needs. The financial adviser needs to 

show that their advice is valuable and useful to consumers.

Tan Kin Lian
President
Financial Services Consumer Association