Performance of Relationship Managers in Bancassurance
Prime Minister's OfficeSpeakers
Summary
This question concerns Miss Cheryl Chan Wei Ling’s inquiry regarding government monitoring of bancassurance relationship managers and recourse for clients who receive insufficient guidance or are misled. Senior Minister Tharman Shanmugaratnam explained that under the Financial Advisers Act and Insurance Act, financial institutions must ensure representatives are fit, qualified, and provide suitable recommendations. Representatives must clearly disclose product features, fees, and risks, including potential investment losses and early surrender costs, to safeguard customer interests. Senior Minister Tharman Shanmugaratnam noted that MAS investigates misconduct, issues prohibition orders against errant representatives, and mandates that financial institutions remediate any observed sales weaknesses. For recourse, customers can approach their financial institutions or the Financial Industry Disputes Resolution Centre (FIDReC), while MAS works with industry associations to strengthen ethical conduct.
Transcript
55 Miss Cheryl Chan Wei Ling asked the Prime Minister (a) whether the Government monitors the performance of relationship managers in bancassurance; and (b) what recourse is available for clients who have insufficient guidance or are misled by them.
Mr Tharman Shanmugaratnam (for the Prime Minister): Financial institutions and their representatives are required under the Financial Advisers Act and the Insurance Act to ensure proper conduct when selling investment and insurance products to customers.
For example, (a) before representatives are allowed to conduct such activities, they must be assessed by their financial institutions to be fit and proper and must pass the relevant examinations in product knowledge; (b) when providing financial advice, a representative is required to make recommendations that suit their customers' needs and financial circumstances; and (c) they must also clearly communicate to their customers key information on product features, relevant fees and charges, as well as the associated risks. These include the risk of investment losses and the cost of surrendering an insurance policy early.
Financial institutions are required to investigate complaints and report to MAS misconduct committed by their representatives. MAS will engage financial institutions to remediate any weaknesses observed in advisory and sales practices. MAS will also investigate and take firm enforcement actions against errant representatives. These include issuing prohibition orders to bar representatives who commit serious offences, such as mis-selling, from working in the financial industry for a specified period of time.
Customers can seek recourse through their financial institutions and the Financial Industry Disputes Resolution Centre (FIDReC), an independent institution established by MAS.
In sum, financial institutions have a duty to safeguard the interests of their customers. MAS has been working with the industry to promote fair dealing and ethical conduct. The banking and insurance industry associations have also established steering groups to strengthen culture and conduct and improve sales and advisory standards. MAS will continue to work closely with financial institutions, their board and senior management, as well as industry associations, to maintain trust in the financial sector.