BIS central bankers’ speeches  3  Let us not short-change the consumers of life insurance and investment products in Singapore. I am heartened to note that some insurers are already consciously recruiting better qualified individuals who can provide value-added advice to their customers. These agents are better able to explain the intricacies of financial planning, and recommend solutions to meet the financial needs of busy professionals or less savvy customers. But we must level the playing field and make this the industry norm. Raising the quality of financial advisory firms Management expertise and financial resources of financial advisory firms The second thrust of our approach is to raise the quality of financial advisory firms. While banks and insurers are generally well resourced, financial advisory firms vary in size. Some firms are so small that shareholders or directors double up as representatives, CEO, CFO, and compliance personnel. Under FAIR, we will review the management expertise and financial resources of financial advisory firms, to ensure they are well managed and financially sound. We will take this review into consideration when admitting new financial advisory firms. Making financial advice a dedicated service Besides raising the quality of FA representatives and financial advisory firms, we must make financial advice a dedicated and professional vocation. Customers looking for financial advice deserve to be served by representatives whose primary focus is to provide quality advice on regulated financial products. Unregulated activities of FA representatives We want an industry where providing financial advisory services is the primary focus of FA representatives.
I will also announce the steps MAS intends to take, as part of a comprehensive review of the financial advisory industry that we are launching. We call this new effort, “FAIR”, or the Financial Advisory Industry Review. FAIR will essentially build on the foundations laid by CEDLI and the FA Act ten years ago. It has two main objectives:   first, to enhance the professional standing and competence of financial advisers; and    second, to create a more competitive and efficient system for the distribution of life insurance and investment products. The overriding aim of FAIR is to protect and benefit the consumer. Putting the customer first – that must be at the heart of all our efforts. Raising the competence of FA representatives Let me begin with the competence of financial advisory representatives. MAS has been working with the FA industry to raise the skills, knowledge and expertise of representatives to serve customers better. The two aspects of this effort are:   improving the product knowledge of FA representatives; and    raising the entry requirements for FA representatives  2  BIS central bankers’ speeches  Product knowledge of FA representatives We have introduced new examination modules to ensure that FA representatives have sufficient knowledge of the wide and complex range of investment and insurance products currently available in the market. Most firms and FA representatives understand and support the need to raise knowledge and skill levels through a set of common examinations.