Other than the titles above, representatives are also commonly referred to as financial practitioners who run their practice in the financial services industry.
However, in the eyes of some consumers, financial practitioners are sometimes just known and regarded as insurance agents, whose role is just to sell insurance or financial products. In this article, we examine the similarity and difference between an insurance agent and a financial practitioner.
In Singapore, insurance agent and financial practitioner are both regulated by the Monetary Authority of Singapore (MAS).
They need to possess minimum entry requirement (like age, education requirement etc); clear Capital Markets and Financial Advisory Services (CMFAS) examination requirements; and fulfil continuing professional development requirements every year.
They have a unique Representative Notification Framework (RNF) number registered with MAS, indicating the regulated activities that they can conduct; the principal companies which they have worked for within the past three years; and if they have had and any formal regulatory action taken by MAS.
According to the definition by Cambridge dictionary, a practitioner is “someone who works in a job that involves long training and high levels of skill”, while an agent is “a person who is paid to buy or sell products or provide a service for a company, but who is not a regular employee” .
From the Insurance Act, we see that an insurance agent is “a person who, as an agent for one or more insurers (which may include a foreign insurer carrying on insurance business in Singapore under a foreign insurer scheme), is or has been carrying on the business of receiving proposals for, or issuing, policies in Singapore; collecting or receiving premiums on policies in Singapore; or arranging contracts of insurance in Singapore”.
From the above definitions, we see that the difference between an insurance agent and a financial practitioner is not just in name, but also in the work and task they do.
An insurance agent task and role are more of a sales and transactional one, but a financial practitioner role is more of a professional one, which includes financial planning and professional advisory that require skills and training, on top of the role of an insurance agent.
The insurance and financial industry landscape has evolved a lot over the years in Singapore.
In the early days when it was insurance product centric and single need focus, an insurance agent role is enough to meet the needs of customers. The requirements are to share the importance of insurance, and to do the application for insurance policies for customers and service their policies.
In today’s context, the landscape has evolved to a stage whereby customers are demanding greater professional service and advice. The requirements have changed to multiple needs, financial planning, wealth management solutions and a wider range of more complex products.
Hence, a financial practitioner will be in a better position to serve customers with needs analysis and planning, on top of the role of an insurance agent.
The 3Cs - Competent, Caring, Compliant
As the famous saying by Shakespeare goes: “What's in a name? That which we call a rose. By any other name would smell as sweet.”
Whether we call ourselves as insurance agent or financial practitioner is just a name. The most important thing is to conduct and carry ourselves as a professional financial practitioner.
Below are the 3Cs that we can adopt and endeavour to be in our practice as a financial practitioner:
We need to be trained and equipped with skills and knowledge to serve our clients. With more complexity of services, demands and products, we need to continue our learning, training and upgrading regularly to remain competent to better serve our clients.
There is a famous saying by former US president Theodore Roosevelt: “Nobody cares how much you know, until they know how much you care.”
Apart from just being competent in our domain expertise, we need to be a caring adviser to our clients, to provide a listening ear to their needs and to be there for our clients when they are in need.
With artificial intelligence and machine threatening to disrupt our industry, we should even practise this unique trait of human to be caring and empathetic, so that we can build lasting relationships, and be the trusted practitioner of choice by our clients.
Besides being competent and caring, we also need to compliant and ethical as well.
There may be situations of temptation, pressure and unintended ignorance whereby one may do the wrong thing.
As practitioners, we need to be wary of these situations, and constantly remind ourselves to always do the right thing and be compliant and ethical in our practice and day-to-day work.
In conclusion, I hope this article shares the similarity and difference between an insurance agent and a financial practitioner.
The difference in name is just a minor thing. The more important thing is for us to conduct and carry ourselves as a professional financial practitioner; be aware and practise the 3Cs above in our day-to-day work.
With this, we can then be the trusted practitioner to serve and add value to our clients; to best represent our firms and companies, and together raise the professionalism and standards of our industry.
This is an IFPAS X Asia Advisers Network collaboration.
The article “Insurance Agent & Financial Practitioner - same or different?” originally appeared in Tuesday Times, an online publication by IFPAS.
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