MAS Forum Letter on Financial Advisory Industry Review
9 May 2012
The Editor ST Forum
MAS is encouraged by the keen interest in the Financial Advisory Industry Review (FAIR). Of the various discussions that have taken place in reports, commentaries, forum letters, and online posts since FAIR’s announcement on 26 March 2012, the pros and cons of a fee-based model for financial advisers seem to have the most attention.
While this is understandable, it is important to note that FAIR goes beyond the issue of advisers’ remuneration. The review will consider how to: (i) raise the competence of financial advisory representatives; (ii) lower the distribution costs of insurance and investment products; (iii) promote a culture of fair dealing in FA firms; (iv) make financial advice a dedicated service; and (v) raise the quality of financial advisory firms. The FAIR panel was formed on 2 April 2012 and is currently soliciting feedback from both the public and industry before it begins its deliberations on suitable proposals. It is premature and inaccurate to suggest that the panel will recommend a fee-based model. Indeed, we have received some interesting suggestions that include a mixture of fees and commissions. We welcome views and suggestions on how we can achieve our objectives of financial institutions that consistently deal fairly with customers and competent representatives who provide quality advice. Consumers and industry players can send these to email@example.com.
Lee Chuan Teck Chairman, Panel for the Financial Advisory Industry Review and Assistant Managing Director (Capital Markets), Monetary Authority of Singapore