Government to review the minimum level qualifications of financial advisory reps

Singapore current requirements do not stack up well against major jurisdictions, says MAS.

 MAS announced yesterday a new effort called “FAIR”, or the Financial Advisory Industry Review, of which the overriding aim is to protect and benefit the consumer.

According to MAS managing director Ravi Menon as part of FAIR, MAS will review the minimum level of qualifications that we expect of our FA representatives, to ensure they stay relevant to the needs and expectations of consumers.

Here’s an excerpt from Mr. Menon speech at yesterday’s Life Insurance Association 50th Anniversary:

The current entry requirement for FA representatives is four GCE “O” level passes. It is clearly not in keeping with Singapore’s rising educational levels, the increasing complexity of products, and higher expectations from a more literate and sophisticated public.
• One out of two Singaporeans has above GCE ‘O’ level qualifications, compared to one out of three, ten years ago.
• One out of four Singaporeans has a degree; this is double the proportion ten years ago.
Our current requirements do not stack up well against major jurisdictions. They have been raising the quality and professionalism of their financial advisers.
• In the UK, the minimum requirement for representatives serving retail customers will be raised by end 2012 to tertiary level qualification, defined as at least a Diploma.
• In Australia, the current educational entry level is a Diploma-equivalent.
Let us not short-change the consumers of life insurance and investment products in Singapore. I am heartened to note that some insurers are already consciously recruiting better qualified individuals who can provide value-added advice to their customers. These agents are better able to explain the intricacies of financial planning, and recommend solutions to meet the financial needs of busy professionals or less savvy customers. But we must level the playing field and make this the industry norm.