Parliamentary Replies
Published Date: 09 May 2000

Parliamentary Question: Investor Public Education

Issues Raised in Parliament


Date: For Parliamentary Sitting on 09 May 2000


Q36. To ask the Deputy Prime Minister if he will state the Government's philosophy on and role in investor public education, and if it will drive or at least co-ordinate efforts of Government-related agencies, such as the Central Provident Fund Board.


1. The government recognises the importance of personal financial planning, in view of the individual's responsibility to ensure his or her own financial security at old age. CPF members who have contributed to CPF throughout their working life should accumulate enough savings to meet their basic retirement, healthcare and housing needs commensurate with their incomes. However, many Singaporeans have higher expectations, especially if they wish to maintain their present lifestyles after they retire. Then their CPF savings alone may not be enough, and they would need to manage their personal savings properly, to supplement their CPF balances. As retail investors, they must learn to look out for themselves, and be discerning in choosing from a growing range of service providers and products.

2. Greater efforts at investor education will be useful. The aim is to equip investors with the basic tools to carry out informed financial investment decisions. An NUS survey commissioned by a bank last year showed that Singaporeans believe they have enough knowledge to manage their money, but most of those surveyed lacked understanding of basic financial concepts.

3. From the point of view of the financial system as a whole, an informed investing public exerts market discipline on financial institutions. This supports our long-term objective of developing a more open and transparent financial sector, driven by fundamentals.

4. MAS has a role in promoting public understanding of the benefits and risks of financial products, but we do not think that the regulator can carry the full burden of educating investors. We will use the Internet to disseminate information to enhance consumer awareness, and will also continue to support initiatives by trade bodies in public education. For example, the Investment Management Association of Singapore (IMAS), as the representative body of investment managers, has established an Education Sub-Committee to promote greater public awareness about the fund management industry, through public seminars, talks and forums, and publications. Another example is the Securities Investors Association of Singapore (SIAS), which has identified investor education as a key activity and is working closely with several brokerages.

5. The CPF Board will continue with its retirement planning programme called "Take Charge. Plan Early. Secure Your Financial Independence Now". It will dovetail this with other government agencies such as the Ministry of Community Development and Sports, to reach out to different target groups.