Singapore:Strengthening trust in financial advisers - MAS Assistant MD

| 11 Mar 2019

Ms Ho Hern Shin, Assistant Managing Director (Banking and Insurance), Monetary Authority of Singapore, delivered her keynote address "Leverage Technology, Build Trust" at the recent LIA Annual Luncheon.

She elaborated on "Strengthening trust in financial advisers" amongst other key messages such as "Technology is transforming the industry" and "Building trust in the use of data". 

We bring you the excerpt: 

FAIR Initiatives 

Building trust with customers goes beyond having sound policies on data governance and usage. 

Since 2014, we have worked with the industry to implement the FAIR initiatives.  These initiatives aim to instil confidence in customers that insurers and their representatives will deal with them fairly.  

Today, we are seeing improvements in the sales advisory process, and some insurers have moved from providing product-centred transactional advice to needs-based advice to deliver more holistic and comprehensive financial advice to consumers.  

These are steps in the right direction in raising standards of conduct and building trust in the insurance industry. 

Responsible recruitment

Last year, LIA members worked closely with MAS to develop a set of proposals to promote responsible recruitment in the financial advisory industry.  

The measures seek to address potential market conduct risks arising from lucrative sign-on bonuses with high sales quotas that drive aggressive sales behaviour and subsequently, improper switching of policies.  

We welcome LIA’s initiative to adopt and apply these measures early on its members.  

MAS is in the meantime working towards effecting regulations to implement the proposals.  We are also working with individual firms to ensure consistent implementation of these measures across the industry.  

I would like to stress the importance for the industry to do this well to maintain trust with your policyholders and the general public.  

MAS will not hesitate to take regulatory actions against individuals who run afoul of our rules to the detriment of consumer interests.  

We will also take action against firms which fail to properly supervise their representatives to fully uphold these recruitment measures.

3 important areas to work on

As a representative’s conduct directly affects the reputation of the firm and the industry, it is essential that insurers maintain high standards in its recruitment and management of representatives.  

How do we do this well?  Let me highlight 3 important areas to work on. 

First, insurers should only recruit competent representatives who will not prioritize their personal financial interests over those of their customers. 

Second, firms should implement policies and measures that send a clear signal to representatives about the acceptable corporate culture.  

For example, implementing good remuneration practices that do not solely focus on meeting sales quotas or promoting specific products, but adequately consider behavioural and conduct factors.  

It is also important to have a robust consequence management framework where appropriate disciplinary actions are meted out when representatives commit misconduct, and where supervisors are held accountable for their actions or inactions.

Third, firms should monitor culture and conduct outcomes and feedback from customers.  You would want to check to ensure that the mood-in-the-middle and the echo-from-the-ground resonate with the tone from the top set by your board and senior management.  

Ultimately, good culture drives good conduct, and good conduct strengthens consumers’ trust and confidence.


In conclusion, we look forward to the industry’s new initiatives and innovations to serve customers better in this fast-evolving digital economy. The opportunities are immense and growing. Serving customers well also includes winning their continued trust by handling their data responsibly, and by prioritising their interests.  

Let’s continue to do right, win trust, so that the business of life insurance will continue to thrive in the digital economy.  

The full message can be found here: "Leverage Technology, Build Trust"

Read also: "Life Insurance Association's priorities for 2019 - Newly-elected LIA President Khor Hock Seng"

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