Dear Sir

I refer to the letter "Dangling gifts to push insurance must be stopped" (BT, 20 Jan 2004).

2   Financial institutions are not prohibited from offering gifts as part of their marketing efforts. However, they are required to comply with the business conduct rules when providing advice or recommending an investment product, as set out in the Financial Advisors Act. Regardless of where the advisory process takes place, financial advisers are required to have reasonable basis for recommending investment products taking into account clients' investment objectives, financial situation and particular needs.  In addition, they must also make full and adequate disclosure of all facts necessary for clients to make informed investment decisions. 

3   While regulations are in place to ensure adequate disclosure and processes are available to help resolve disputes, individual investors must be responsible for their investment choices.  Regardless of whether a promotional gift is offered, they should not commit to buying an investment product unless they have understood the product and the financial commitment involved, and are convinced that it is suitable.

Angelina Fernandez
Director (Communications)
Monetary Authority of Singapore