On 11 May 2015, MAS completed the policy and legislative consultations on recommendations under the Financial Advisory Industry Review (FAIR). The objective of FAIR is to raise the standards of the financial advisory (FA) industry and improve efficiency in the distribution of life insurance and investment products in Singapore.

Key changes were made to the FAA, Insurance Act and subsidiary legislation in 2015. The following initiatives were implemented on 1 January 2016:

Balanced Scorecard Remuneration Framework for Representatives and Supervisors
This framework seeks to promote a culture of fair dealing by subjecting a significant proportion of a representative's remuneration to nonsales key performance indicators. Under the Balanced Scorecard (BSC) framework, the representative is assessed based on whether he has understood the customer's needs, recommended suitable products, made adequate disclosures and conducted himself professionally and ethically. There was a one year transition period from January 2015 for FA firms to familiarise themselves with the BSC requirements, before the framework was legally effected on 1 January 2016.

Restrictions on Non-Financial Advisory Activities for Representatives and Standalone Financial Advisory Firms
MAS implemented legislation restricting the types of non-FA activities which representatives and standalone FA firms may conduct to maintain a high level of professionalism and competence in the FA industry. Any non-FA activities conducted by these persons should not be in conflict with their FA roles, result in a neglect of their FA duties or bring disrepute to the FA industry. Representatives are also prohibited from conducting moneylending businesses, promoting junkets for casinos, acting as real estate agents and marketing products that are not regulated under the FAA as investments.

Banning of Short-Term Incentives
MAS banned the payment and receipt of short-term incentives in the FA industry. This will better align the interests of FA firms and their representatives with those of their customers and ensure that FA firms and their representatives are not influenced by such incentives when recommending investment products to their customers.

Continuing Professional Development
MAS prescribed Continuing Professional Development (CPD) training requirements for FA representatives to ensure that they remain current and up-to-date in their knowledge of market and regulatory developments. FA representatives are required to fulfil a minimum of 30 CPD training hours annually, of which 12 hours are to be in Ethics, and Rules and Regulations.

MAS will monitor the effectiveness of these initiatives in meeting the objectives of FAIR.