Mr Edy Hartono, President of the Financial Planning Association of Singapore (FPAS)
Council members of FPAS
Distinguished guests
Ladies and gentlemen
Introduction
1. Good evening. It is my pleasure to join you today at the Financial Planner of the Year Awards 2019. My congratulations to all Award winners. This is the second year that FPAS has organised these Awards to honour financial advisory or FA representatives who excel in their profession, and demonstrate excellent financial planning skills and knowledge. I am heartened by the Association’s efforts to raise professional standards by recognising these deserving individuals.
2. As we all know, Singapore’s population is ageing rapidly. According to a study published in a medical journal, The Lancet, in October 2018 by the Institute for Health Metrics and Evaluation at the University of Washington, Singapore was ranked third in global life expectancy. Singaporeans’ average life spans are projected to hit 85.4 years in 2040
3. However, given the wealth of financial products and services available in the market, consumers may have trouble knowing where and how to start planning for their financial future. FA representatives can play a critical role by helping Singaporeans plug this knowledge gap and put in place appropriate plans to balance between their current and future financial needs.
4. In this regard, MAS and the industry have made concerted efforts over the past few years to equip industry professionals with relevant competencies. Today, I would like to highlight two areas where further work is being done to raise the knowledge and skills of FA representatives and the standards of financial advice more broadly:
i. First, enhancing the regulatory entrance examinations; and
ii. Second, promoting continuing professional development or CPD.
Enhancing regulatory entrance examinations
5. Let me first touch on enhancements being made to the entrance examinations. FA representatives are currently required to pass relevant modules under the Capital Markets and Financial Advisory Services Examination (or CMFAS) before they are allowed to provide financial advisory services. CMFAS seeks to ensure that these professionals have a good understanding of their regulatory obligations and the financial products they wish to give advice on.
6. MAS has consulted on the proposed inclusion of ethics and skills contents to the current CMFAS modules on rules and regulations, with a view to further raising the technical competency of advisers and building a culture of high ethical standards. The proposal received broad support and we are now working with the Institute of Banking and Finance (IBF) and Singapore College of Insurance (which administer CMFAS), to roll out the revised modules. MAS will announce the implementation details shortly.
Ethics-related Content
7. So why is MAS introducing ethics-related content to the entrance examinations for FA representatives? It is not sufficient for industry practitioners just to be aware of their regulatory obligations. They must also understand the principles behind the rules and regulations. The new ethics content will not only test prospective FA representatives on their understanding of ethical principles, it will also test their responses in ambiguous situations where there may not be explicit rules.
8. For example, candidates sitting for the upcoming revised CMFAS module may be presented with a scenario where an FA representative observed that a large proportion of a fellow representative’s sales comprised high risk investments made to vulnerable customers. While this representative was not a party to these transactions, he wondered if there could be issues with his colleague’s advisory and sales conduct, and whether he should share his concerns with his firm’s compliance unit. Candidates are expected to apply an ethical framework to assess such scenarios and identify what is the right thing to do. This new ethics content would help advisers develop a greater appreciation of their ethical obligations and nudge them to go beyond following the letter of the law, and focus on doing right by the customer.
Skills-related Content
9. Equally, the case studies prepared by FPAS in this year’s Awards clearly illustrate that the advisory and sales process is not a ‘box ticking’ exercise. Advisers need to actively engage customers to understand their needs, financial situation, and risk profile. While many skills are learnt on the job, the new skills-related content in the revised CMFAS examinations will equip FA professionals with a fundamental understanding of core skills and processes.
10. The new skills content will go beyond equipping FA representatives with knowledge and comprehension of the financial advisory process. For example, candidates may be presented with a case study specifying a particular financial product and are expected to apply their risk profiling skills to evaluate the circumstances under which the product would be an appropriate recommendation. Such skills are core competencies for advisers, and acquisition of these skills as part of the CMFAS entrance examinations would facilitate provision of sound financial advice from the onset.
Promoting continuing professional development
11. This now brings me to the second area – promoting continuing professional development. While enhancing the regulatory entrance examinations will help raise the baseline competencies required of FA representatives joining the industry, it is important that industry professionals continue to acquire new skills and refresh their knowledge. Doing so enables them to better serve their customers, as well as keep abreast of new products and services, and industry and regulatory developments.
12. MAS has long recognised that continuing professional development is not an option but a necessity. As part of the Financial Advisory Industry Review (or FAIR), we have formalised a minimum of 30 hours of annual CPD training for FA representatives. Since then, there have been other initiatives that offer opportunities for industry professionals to deepen, as well as acquire new and relevant functional skills.
13. One such initiative is the IBF Standards for Financial Planning. This is a set of competency standards that provide a structured professional development roadmap for FA representatives to chart their own learning journey and develop the relevant skills needed for their jobs. These Standards, developed in close consultation with the industry, including FPAS, are designed to equip FA representatives with competencies commensurate with their experience.
14. For example, FA representatives who have newly joined the industry can pursue IBF Level 1 training programmes that allow them to develop a fundamental knowledge of financial products and basic skills such as provision of cash management, insurance, investment and retirement advice. More experienced advisers can pursue IBF Level 2 training programmes that will strengthen their competencies in more complex areas such as provision of estate planning and business succession planning services. Those who are leading teams can also consider training programmes relating to management of other advisers.
15. FA representatives who meet the relevant training and experience criteria can be IBF Certified. This is an industry-endorsed mark of quality and a tangible way of demonstrating competency to consumers. Those who are committed towards continuing professional development will not find it difficult to attain certification. IBF already recognises professional qualifications, such as FPAS’ Certified Financial Planner (CFP), that many of you already have or aspire to attain. FA representatives can attend accredited programmes under these IBF Standards as part of their annual CPD training hours so that they can be IBF Certified within a few years.
Conclusion
16. It is imperative that FA representatives continue to focus on understanding their customers’ needs and constantly upgrade their competencies to deliver quality financial advice. I encourage all of you to take ownership of your own professional growth and upskill yourselves to better serve the evolving needs of Singaporeans.
17. Creating a sustainable financial future for Singaporeans also requires informed and empowered consumers. In this regard, I would like to take this opportunity to thank FPAS for your assistance in running financial clinics at the recent MoneySense roadshows held at various heartland locations across Singapore. The financial clinics served as excellent face-to-face touch-points for members of the public to discuss their financial gaps with FPAS volunteers, who provided guidance and tips to address identified gaps.
18. We look forward to future partnerships with FPAS. We will continue working alongside the Association in efforts to build trust in the industry by raising standards of professionalism and competence of FA representatives in Singapore.
19. Once again, congratulations to all the Award winners. I wish everyone an enjoyable evening. Thank you.
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