Media Releases
Published Date: 22 June 2021

MAS Releases Results of Third Mystery Shopping Exercise – Majority of Recommended Products Met Customers’ Needs

Singapore, 22 June 2021... The Monetary Authority of Singapore (MAS) today released the findings of its third mystery shopping exercise (MSE). Results from the MSE show that majority of product recommendations made by Financial Adviser (FA) representatives met the mystery shoppers’ investment and protection needs.

Suitable recommendations, accurate disclosures and appropriate explanations

2     The exercise was conducted on 500 FA representatives from 12 insurers and licensed financial advisers from mid-2018 to end-2019. Compared to the last MSE conducted in 2011, the percentage of suitable product recommendations improved from 70% to 88%. Most FA representatives helped shoppers make accurate and complete disclosures of their medical conditions. The investment returns illustrated in the insurance policies were properly explained by most FA representatives.

Culture and tone from the top

3     These findings have come on the back of many years of sustained effort and investment by both MAS and the FA industry to raise the competency of FA representatives and the quality of their sales and advisory practices. Board and senior management of FA firms who have placed emphasis on delivering fair dealing outcomes and put in place robust policies and controls have generally fared better in the MSE. In particular, among the 12 FA firms covered in the MSE, one firm stood out as having a robust sales and advisory process that translated into 100% suitable product recommendations. This firm has invested heavily over the years in instilling high ethical and conduct standards among its representatives, with strong tone from the top to put customers’ interests first. MAS will continue to look to the Boards and senior management of FA firms to drive good conduct outcomes for customers.

Areas for improvement

4     Notwithstanding the findings above, the MSE highlighted opportunities for improvement in the following areas:

(a) Sales closed at roadshows had higher incidences of unsuitable recommendations or inappropriate influence through the use of gifts or incentives compared to sales closed through customer referrals.

(b) Majority of FA representatives failed to properly identify if the mystery shoppers were vulnerable customersThese are clients who meet any two of the following criteria: (a) aged 62 years or older; (b) not proficient in spoken or written English; (c) has below GCE ‘O’ level or ‘N’ level certifications, or equivalent.. While this did not eventually affect the suitability of products recommended during the MSE, MAS takes a firm view that vulnerable customers should nonetheless be identified to accord them additional safeguards.

Follow-up actions

5     MAS has required the 12 FA firms to address the deficiencies uncovered by the MSE. MAS will also review its rules to improve FA representatives’ conduct at roadshowsPlease refer to the Guidelines on Standards of Conduct for Marketing and Distribution Activities by Financial Institutions, for more details at link. and consult on proposals to enhance safeguards for vulnerable consumersPlease refer to the consultation paper at this link. The proposals include requiring FA representatives to affirm that they have assessed if a customer is a vulnerable customer, mandating audio recording for call-backs made by supervisors of FA representatives, and requiring additional independent post-transaction checks..

6     The MSE also showed that while fact-finding conducted by the FA representatives was generally not as comprehensive as that required by MAS’ rulesAs set out under paragraph 11 of Notice FAA-N16 Recommendations on Investment Products, FA representatives are required to collect comprehensive information from the customer. Examples include the customer’s financial objectives, risk tolerance, employment status, financial situation (assets, liabilities, cashflow and income), sources of income, existing investment portfolio and financial commitments., there was sufficient financial information obtained to make suitable product recommendations in most cases. MAS recognises that while obtaining a full set of a customer’s financial information is important for holistic financial planning, it may not be necessary in the case of simple or low-cost products. MAS will thus review fact-finding requirements to allow FA representatives greater flexibility to collect information that better tailors to the needs and profiles of their customers.

Customers’ roles

7     Customers too have important roles to play when it comes to meeting their own financial planning requirements. They should review sales documents to ensure accurate representation of their financial profiles and needs. This would enable FA representatives to recommend products suited to their requirements. MAS encourages members of the public to refer to MoneySense, the national financial education programme ( for more information on what to look out for when seeking financial advice from FA firms and their representatives.

8     Mr Lim Tuang Lee, Assistant Managing Director (Capital Markets), MAS, said, “FA firms have progressed and enhanced their standards of practice to raise the quality of financial advice provided to customers. High standards of practice require systematic and focused attention by Board and senior management of FA firms to ensure that FA representatives put customers’ interests as top priority. This includes the proper onboarding and training of representatives, active supervision and monitoring of their sales and advisory activities, as well as putting in place appropriate incentive and remuneration policies and robust disciplinary frameworks. MAS will work with FA firms to continually raise standards of conduct and embed a culture of fair dealing in the financial advisory industry.”