Response to “Clients risk losing out when agents are poached” – The Straits Times, 18 September 2017
We thank Mr Francis Cheng for highlighting the possible impact on consumers arising from the mass movements of financial representatives between financial institutions (FIs). (“Clients risk losing out when agents are poached”, Straits Times, 18 September 2017).
The Monetary Authority of Singapore (MAS) recognises that such mass movements of representatives could pose risks to consumers. There are regulations and guidelines requiring FIs to have robust controls to safeguard the interests of consumers in their provision of financial advisory services.
FIs and their representatives must ensure that the investment products and insurance policies they recommend to their customers are suitable, taking into account their needs, financial situation, and personal circumstances. They are prohibited from recommending a switch from one investment product or insurance policy to another in a manner that is detrimental to the customer. FIs are also required to put in place systems and processes to identify any unusual trends in switching transactions. They must have procedures to ensure that each switch recommended by a representative is reviewed by a supervisor for appropriateness. FIs must also implement systems to identify representatives with unusually high volumes of switching transactions, so that they can take appropriate action.
MAS recognises that consumers may have concerns about the servicing of their insurance policies, when their representatives move to another FI. In this regard, MAS expects FIs to reach out to their affected customers and assign new representatives to service these customers promptly. FIs also have dedicated customer hotlines and service centres to address customers’ queries.
MAS is looking into the recent mass movement of representatives between FIs and is in discussions with the FIs concerned on the measures they are implementing to protect the interests of their customers. We will not hesitate to take action where FIs or their representatives are found to have breached regulations or engaged in improper conduct. We will also continue to monitor industry developments closely, and will engage the Life Insurance Association Singapore on their proposal to come up with parameters to manage such mass movement of representatives in the industry.
Bey Mui Leng (Ms)
Director (Corporate Communications) Monetary Authority of Singapore