Wednesday, October 27, 2004

Guidelines on switching of investment products 

The MAS has issued new guidelines to protect investors dealing with financial advisers. Excerpt from the news report:

MAS issues guidelines on switching to protect investors
The Monetary Authority of Singapore has issued guidelines on the switching of designated investment products. The guidelines broadly aim to protect investors...

The MAS guidelines will ensure that financial advisers put in controls, processes and procedures that deter undesirable switching activities. They also include disclosure requirements to ensure that consumers are fully informed of the costs and implications of switching.

The guidelines recommend that financial advisers structure remuneration packages that reward representatives who provide professional advice to consumers...
The fact is that at present, most financial advisers in Singapore remain little more than insurance and unit trust salesmen, with the emphasis on selling rather than advising. Until financial advisory firms restructure the remuneration packages for their advisers, this will remain a problem, the new guidelines notwithstanding.

Caveat emptor.


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