On the Straits Times, 13 March 2009, it is said that "The Monetary Authority of Singapore (MAS) released a draft consultation paper yesterday outlining what is acceptable practice and what crosses the line into mis-selling and deception.". Is this enough? Or a simple wayang to show that they are responding to bad selling. Remember FAA 2001? Financial Advisory Act? Meant to do the exact same in curbing bad selling practices in the insurance industry then. Super wayang... What did it result in? Certification of more unqualified people to give financial advice. This certification is indeed the bane of bad investments as the lay man is deceived that these so-called certified Financial Advisors are actual professionals in financial planning. Let me use a simple analogy. If you had a company, would you hire a fresh finance grad as the CFO, Chief Finance Officer of your company?If not, why then would you do the same to your retirement?
A MAS certification is nothing but a license. A license to sell Financial products to others. It is not a certification course and should never be presented as so. If anything it should not be called a M1,2,3 or whatever certificate. It should be called a MAS license. Do we call the drive test that we passed a driving certificate? Does it certify us as good drivers by passing the course at the driving centre? It doesn't right? Do therefore why should the course at MAS be regarded as a professional certification? It should just be a license to sell and perceived as a license to sell just like a license to drive/ the license to sell tobacco at a store. Nothing more. They are not professional advisors. They are sales people.
Am I being to unfair to say that they are less equipped/knowledgeable in investment products? In all fairness, they are equipped and knowledgeable. But only to the extend that the company/agency that they represent provides them. A template financial health check, financial calculators and market/product briefs. The car sales man is only as knowledgeable as what his company provides him plus a little homework if he's truly passionate about his products. His interests? Sales...
If your FA refunds you every bit of his commission so that you can truly have every dollar for your planned future. I would say... then truly... he is out for your interests. However if he gets to keep up to 40% of your premium as his payout with recurring payouts on subsequent years, then his interest is undermined to keep you locked in with the product. If he doesn't even inform you about that, then you know all the more there's some form of deceit involved here. Even in MLM commission tables are transparent. So I would dare say even friends who sell MLM to you are more honest than friends who have sold forms of investment products to you.
Back to the move by MAS? Whether it is a truly effective move or one that is like the FAA 2001? We will have to see... Time will tell. But remember, your FA is just a sales man. Take his word with a pinch of salt. The market is always right to buy/invest/save in his eyes.