On the issue of trust, recent episodes of large-scale movement of representatives have cast the industry in an unfavourable light. Such mass recruitment of representatives by one firm gives rise to heightened market conduct risks, with respect to aggressive sales tactics and improper switching. MAS has worked closely with LIA on measures to address these risks and we will be issuing a public consultation soon to promote responsible recruitment practices in the financial advisory industry. Meanwhile, LIA members have agreed that they, as well as their Financial Advisory (FA) subsidiaries will go ahead to adopt a number of these measures. This is a positive step. Briefly, these measures include: (a) Capping a representative’s sales targets and sign-on incentives in the first year after the representative joins the new FA firm. This reduces the pressure on representatives to engage in 4/5  BIS central bankers' speeches  aggressive sales tactics to meet inflated sales targets; (b) Spreading sign-on incentives over a minimum period of 6 years, to create longer- term alignment between the representative and his new FA firm. This will foster better quality aftersales services to customers; (c) Reducing the entitlement to sign-on incentives if the persistency of the policies serviced by the representative at his previous firm falls below industry norms, to deter improper switching; and (d) Requiring the FA firm to undertake enhanced monitoring of its representative’s sales transactions to verify that the sales and advisory process has been properly conducted, which will include customer call-backs conducted by an independent external party.
The second is that we want competition and innovation in financial services – it can increase efficiency, functionality and resilience. Setting out the regulatory approach allows those who want to innovate by providing better products and services to understand the risks that need to be managed as they develop those products. It also ensures that innovation is not simply competing by taking higher risks. This approach has been a key element in the evolution and adoption of innovation in payments in the UK in recent years. Against the background of increasing digitalisation of everyday life, the combination of technological advance and appropriate regulatory frameworks[1] - both to foster competition and to manage risks – has transformed the way we pay. It has also stimulated the growth of the UK Fintech sector which is now the second largest in the world[2]. Contactless’ card payments are now used by close to 90% of people and make up almost a third of all payments in the UK, Nearly a third of UK adults use mobile payment apps such as ApplePay or GooglePay. Seven million consumers and three-quarters of a million SMEs are using Open Banking products. Several digital only challenger banks operate in the UK providing competition and innovation to the UK banking sector. These changes have not only transformed the way people pay but also the type of money they pay with. Two types of money circulate in the UK today.