UK banned financial advisers from taking commissions from 31 December 2012. After more than 3 years, the regulator has to revisit the changes made because of the following problems: First problem: The supply of UK advisers dropped The supply of UK advisers dropped from slightly above 40,000 in 2011 to slightly above 30,000 in October 2014. This means the supply of financial advisers decreased. … [Read more...]
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These articles are about ethics and market conduct of financial advisers
I was forced to apologized for an unfavorable product review
For those who follow my blog for a long time will notice that I seldom write on any kind of product review. The reason is because 7 years ago, I had a very bad experience. I did a product review on my blog. It was a very lousy product. The funny thing was that I did not mention the product name nor the product provider. However, the product provider saw my blog article and immediately … [Read more...]
Sales Incentives banned from 1 January 2016
Financial adviser representatives or known as advisers and other times also known as insurance agents will no longer be entitled to receive remunerations that are connected to the volume of sales. That is to say sales incentives will no longer be permitted. For those who are not aware, sweeping changes to the regulations have been made in the financial advisory industry. One of the changes is … [Read more...]
ST forum: Balanced Score Card motivates financial advisers through punishment
Financial advisers will be facing the new Balanced Score Card framework from 1 January 2016. This Balanced Score Card framework actually started in 2015 except for the part on monetary penalty. From 1 January 2016 onwards, there will be monetary penalty for not achieving certain KPIs. What is the Balanced Score Card? Imagine you work for a company and your boss tells you that from 1 January … [Read more...]
How Financial Advisers Can Earn MUCH more by using the Direct Insurance Purchase
As many already know, the Direct Insurance Purchase was officially launched on 7 April 2015 today. Many financial advisers are unhappy that the government mandate that insurers sell insurance directly to consumer and bypassing their agents. After doing some analysis, I found that financial advisers can actually earn even more if they tell their customers to buy direct. Here was what I … [Read more...]
How financial advisers are paid?
This article is inspired by this article YOUR PRACTICE-How to tell clients financial advice isn't free. I have met many individuals who could not understand how financial advisers are paid. Very often, they think financial advisers have a salary. In Singapore, most advisers do not have a salary. They are self-employed. However, regulation requires them to be subject to a single Principal which … [Read more...]
Why there is no fiduciary duties between financial advisers and clients in Singapore?
Here is short transcript between Senator Carl Levin and Goldman Sach’s CEO Lloyd Blankfein. The argument is whether should Goldman Sact disclosed to clients it had betted against the security which they sold to clients. To Senator Levin, that’s considered conflict of interest. But to Goldman Sach, there is no necessity to disclose it because this is part and parcel of market making and that they … [Read more...]
Similarities between botched plastic surgery and botched financial plan (or lack of it)
I read with interest in a recent article from Sunday Times on 11 May 2014 - “Beauty quests that end in tears”[1] and “The dark side to the pursuit of perfection”[2]. The articles were on the obsession with plastic surgery in South Korea and how a number of Singaporeans who traveled to the country only to come back with a botched face. As I read those articles, I thought I was reading about the … [Read more...]
Financial advisers with many confusing titles
Many consumers are confused with the numerous and confusing titles financial advisers have. The good news is that you are not alone. The bad news is there is no way to differentiate between the good and the bad. Currently, almost all representatives are actually salespersons in terms of job function. That is why consumers are not willing to pay for financial advice and in fact they should not … [Read more...]
Why accredited investors are in for a raw deal
Accredited investors in Singapore are high networth individuals. Accredited investors are also at greater risk of being mislead compared to others. Under the Securities and Futures Act, an accredited investor means (i) an individual — (A) whose net personal assets exceed in value S$2 million (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in … [Read more...]
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