No More Licensing For Financial Adviser Representatives

Under the current Financial Advisers Act (FAA), financial adviser representatives of independent financial advisory firms had to obtain individual licenses from MAS.

A new adviser wanting to enter the business therefore will need to submit an application to MAS for their screening and approval.

On the other hand, those who are employed from banks or insurance companies were exempt from this licensing requirement. However, the banks and insurance companies were still required to do their own necessary reference checks on any new applicants.

This had led to an uneven playing field as the approval process for a new license from MAS can take anywhere from a few weeks to more than six months. There is also the possibility of inconsistent reference checks done by the banks or insurance companies.

Many had expected MAS to narrow this discrepancy. One way is by requiring the representatives of banks or insurance companies to have some kind of individual license or require them to go through the same MAS screening.

It was reported in yesterday’s Sunday Times that MAS has instead decided to do away with the licensing requirement for financial adviser representatives. Instead, an online registrar called the Register of Representatives will be setup for companies to register the names of their representatives. This capturing of data will only take 7 to 14 days and all the information will be available to the public.

The public will be able to check a representative’s employment history for the past three years, any records of disciplinary actions and the regulated advisory activities that he is allowed to engage in.

All companies will now be required to do their own reference checks with previous employers, credit agencies and the police.

Note that while the individuals do not need to be licensed individually, the companies that employ them will still need to be licensed by MAS and fulfill all the necessary licensing requirements.

Looks like I will be able to save on the couple of hundred dollars that I pay to MAS every year for the licensing fee.

But are we taking one step backwards?

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6 comments

FFA says 13 years ago

Licensed also no use.
These so called licensed FA just wanted to be “INTRODUCER”.
It is much worse than an exempted FA.
Many people were misled by these so called licensed FA.

lioninvestor says 13 years ago

MAS’s response to the public consultation on this can be found here:

http://www.mas.gov.sg/resource/publications/consult_papers/2009/Response_to_Feedback_final.pdf

Nuts says 13 years ago

Frankly, looking at 99% of RMs, FAs, FCs, agents etc, the authorities might as well throw away the FAA. Go back to the old days and use purely Insurance Act, Securities Act, Futures Act, and the various precedents of tort and contract law. There is no difference — it is still caveat emptor, go in with your eyes big big. Still need to fight hard for your own rights and be ridiculed or treated with contempt in the process, whether in Fidrec or in Court. No govt agency to take up the cases of individual customers, to investigate on their behalf and to take the FIs and their reps to court for jail terms and $100M fines.

The authorities can even simply tell aggrieved customers to “engage your own lawyer and sue in civil court”. When the authorities finally do something after all our competitor countries have punished the wrongdoers, the punishment is laughably ridiculous. E.g. Banning FIs from selling structured products that already nobody is interested in, and the FIs themselves also don’t want to sell anymore. Or to ban 2 or 3 RMs from being financial salesman, even though they have long resigned from the industry.

DanielP says 13 years ago

I think it is a step back for buyers and a step forward for sellers.
It looks like MAS wants to knock it into our heads that is it always Buyers Beware.

tattooedbanker says 13 years ago

Honestly, i dunno if this is a step forward or back, but i am all for the idea of the Register of Representatives, although i think some concerns i may have will probably be in regards to the privacy of these representatives as to how much information is gng to be shared to the public.

The Watchman says 13 years ago

Yes, it is a step backward. Why the about turn by MAS?
One reason is to save the insurance companies and the banks of their salesmen and conmen and women from being exposed by MAS. It is embarrassing to betray members of the family, right?.
The onus of check is ‘delegated’ to the insurance companies and the banks. Guess what these outfits will do? As usual self regulation will lead to cover up of the rogue agents but high producers in deep heap of shits.
Another wayang by MAS. Individual licensing will kill all the tied agents especially the high producers, the mdrt tot agents.
MAS is beholden to the ??????????.

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No More Licensing For Financial Adviser Representatives

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