by Jared Heng
The Monetary Authority of Singapore (MAS) has set up a review panel for the Financial Advisory Industry Review (FAIR) process, which was announced recently.
Chaired by MAS’s assistant managing director for capital markets, Lee Chuan Teck, the panel comprises representatives from industry associations, consumer bodies, the investment community, academia, and other stakeholders.
Among the 13 panel members are Mr David Gerald, President of Securities Investors Association Singapore (SIAS), Mr Piyush Gupta, CEO of DBS Group, and Mr Ong Ye Kung, Deputy Secretary-General of the National Trades Union Congress. Another panel member is Tan Hak Leh, President of Life Insurance Association Singapore.
The review panel is tasked with reviewing and proposing recommendations on the five key thrusts of FAIR, as outlined by MAS’s managing director Ravi Menon on March 26.
These include raising the competence of financial advisory (FA) representatives and quality of FA firms, making FA a dedicated service, lowering distribution costs, and promoting a culture of fair dealing.
Lee Chuan Teck, Assistant Managing Director for Capital Markets at MAS, said: “Our vision is for financial institutions to put customers first, and for customers to have access to affordable life insurance and investments to meet their financial planning and retirement needs.”
According to Lee, preliminary findings in a recent “Mystery Shopping” exercise commissioned by MAS showed that up to a third of recommendations by FA representatives were “clearly unsuitable” and representatives were not upfront in disclosing fees and charges.
MAS has invited the public to submit their feedback to the central bank during the review period.
In a statement on Monday, SIAS expressed confidence that with the inclusive review panel for the FAIR, investors can expect better service in terms of quality and professionalism from financial advisers in the future to make more informed judgements.
SIAS’s president, Mr David Gerald, said: “I’m glad that MAS is clarifying its expectation that financial advisers should be primarily focused on providing financial advisory services and that they should not be engaged in conflicting activities. SIAS fully supports this. With the rapid development of financial markets and products and more discerning consumers, it is imperative that financial advisers be focused on keeping up with developments and serving consumer needs. They should not be engaging in activities which might pose conflicts or tarnish the reputation of the industry.”