AFAS 12th Annual Congress
4 - 5 July 2013, Grand Copthorne Waterfront Hotel Singapore
Theme: We are ready
Ms Merlyn Ee, the Executive Director of Capital Markets Intermediaries at MAS, was the Guest of Honour.
Excerpts of Ms Ee's speech
Bringing the Financial Advisory Industry to Greater Heights
My vision for the financial advisory industry in Singapore is for financial advisers to be viewed as professionals, just like lawyers, engineers and accountants, with their own code of conduct and high standards of practice. We are not there yet.
But let's not lose heart. I believe the financial advisory industry can rise to the challenge. This would require financial advisory firms to focus on three key areas:
a) first, the Board and senior management need to set the right tone and culture to promote fair dealing with customers;
b) second, representatives have to adopt a long-term view of the business and build trust with their customers; and
c) third, financial advisory firms need to invest resources to build robust systems and processes to support their business.
Role of Board and Senior Management
The Board and senior management must take responsibility for embedding a culture of fair dealing in their organisations that goes beyond meeting business goals and mere compliance with regulatory requirements. They should inculcate a corporate culture where customers' interests are placed first. After all, customers are the heart of the business and there is no better way to grow a business than having satisfied customers.
Let me share an example to illustrate this. In 2008, MAS required a number of financial institutions to investigate customer complaints on the sale of structured notes linked to Lehman Brothers. I recall one case where the management of a financial institution decided to award full compensation to a long-standing customer even though that customer did not fully meet the criteria for a full payout. The management gave the customer the benefit of the doubt and did not take an overly legalistic approach to her complaint. The customer was so grateful that she not only continued to invest with the financial institution but also introduced her family and friends to open accounts there.
To strengthen the accountability of the Board and senior management in promoting a culture of fair dealing, the FAIR panel has recommended that MAS incorporate such assessment in our regulatory review and risk assessment of financial advisory firms. The FAIR panel has also proposed that financial advisory firms adopt a balanced scorecard framework for remunerating their representatives, which incorporates non-sales KPIs. MAS is likely to adopt both these proposals.
Role of Representatives
Financial advisory representatives should only enter the industry if they have a genuine interest in helping Singaporeans meet their financial goals and view the profession as a long-term career.
There are professional and dedicated representatives in the industry who build lasting and meaningful relationships with their customers. A colleague of mine shared with me a positive experience he had with a representative last year. That colleague visited a financial advisory firm to enquire about a product for retirement and told the representative that he was prepared to put aside a certain sum of money each month for that product. To his pleasant surprise, the representative advised him not to over-commit at the onset and to instead start small and slowly build up his savings over time.
I recognise that financial advisory can be a tough business to be in, especially in a representative's initial years when he is still trying to establish himself and build a sustainable customer base. This is where I would like to encourage financial advisory firms to provide training and support for new entrants and equip them with the tools and technology to do their jobs well. We must also not forget that even experienced representatives need to continually upgrade themselves. In this area, the FAIR panel has recommended ways to raise the competence of financial advisory representatives, such as requiring representatives to undergo at least 30 hours of structured CPD training annually, including four hours of training on Ethics and eight hours on Rules and Regulations. These are recommendations that MAS finds sensible.
Role of Systems and Processes
Systems and processes play a critical part in strengthening a financial advisory firm's value proposition. They help ensure that the firm's vision and culture cascade down to the day-to-day operations. In addition, they help identify areas of weakness and facilitate compliance with regulatory requirements and company policies.
A financial advisory firm with weak processes and controls will over time lose the trust and confidence of its customers. Financial advisory firms must therefore have good corporate governance in order to protect their reputation and franchise. This is why the FAIR panel recommended that financial advisers should have a compliance function that is independent of their sales and advisory activities.
Role of Other Stakeholders
(1) Well Educated Consumers
It is important for consumers to be aware of their needs and to ask the right questions when developing plans for their financial well-being. Financial education that is readily available can help achieve this.
A key MoneySENSE initiative was the recent launch of the MoneySENSE-Singapore Polytechnic Institute for Financial Literacy to provide free financial education to the public. The MoneySENSE website is also a useful resource for consumer guides and educational materials on a wide range of financial topics and products.
Since the launch of the MoneySENSE programme ten years ago, more than 200,000 consumers have attended talks and road shows organised by MoneySENSE. While this is encouraging, we need to reach more Singaporeans and equip them with the knowledge and skills to take charge of their finances. When seeking financial advice, consumers should be prepared to invest more time during the fact-find process. This will allow advisers to obtain key information to better understand their financial situation, risk tolerance and investment goals. This will in turn enable the advisers to develop an appropriate financial plan and recommend suitable products.
Consumers should not be afraid to demand more from their advisers. They should ask questions to better understand the range of products available in the market and compare these with the products recommended to them. It is also important that consumers understand how various products may or may not meet their needs before making a decision on which product to purchase. In this area, the FAIR panel's recommendation to develop an online web aggregator to allow consumers to more easily compare pricing, benefits and other features of similar insurance products offered by different insurers, will help consumers make a more informed choice. MAS is studying this carefully.
(2) Industry-Led Initiatives
I would like to take this opportunity to encourage industry associations such as AFA to take the lead in coming up with initiatives to address problems identified in the industry. MAS need not intervene if the industry is able to come up with credible solutions.
My challenge to all financial advisers is to continue to build customers' trust and confidence in your products and services. This can be achieved by adopting a more customer-centric approach where customers are dealt with fairly and where the focus is on helping customers meet their financial and life goals. MAS looks forward to working closely with AFA and all other stakeholders to implement the FAIR proposals and bring the financial advisory industry to greater heights.
For the speech in full, go to www.mas.gov.sg
SMU CSS Conference
5 July 2013, Singapore Management University
Theme: Retirement readiness - Income adequacy, long-term care and social well-being
Singapore has one of the world's lowest fertility rates and longest life expectancies, thus making it one of the fastest aging nations. She is confronted with the challenge of developing sound policies and infrastructure to adequately prepare its citizens for retirement.
Rising life expectancies imply the need for the elderly to accumulate sizeable nest eggs for retirement. Can Singapore's pension system adequately help citizens accumulate sufficient savings to finance their retirement?
While Singaporeans are blessed with longer lifespans, their golden years are likely to be stricken with chronic and debilitating illnesses that require long-term care. Like other countries, Singapore now faces the urgent task of setting up the necessary infrastructure to deliver efficient and cost-effective long-term care to their citizens. Besides the financial aspects of long-term care, another challenge is the estimation of demand for formal institutional care and informal home care in the next few decades.
With the high cost of living, most households are sustained financially with dual incomes. Consequently, aged parents are often left at home with little social interaction. Researchers found that without a supportive social environment, the elderly develop cognitive and psychological problems. In countries such as Australia and the United States, it is common for retirees to live together in retirement villages. Such housing options provide not only social interaction for the aged, but also other benefits such as medical care and recreational activities. It may be timely to re-evaluate the feasibility of setting them up in Singapore.
Challenges and opportunities in setting up retirement villages in Asia
Using micro-simulation to create a synthesised data set for testing healthcare policy options
Pathways to disabilities - predicting health trajectories
ADLs and nursing home admittance
Global retirement income adequacy
This annual series, first organised in 2008, has steadily attracted more and more participants from the life insurance industry.
Talk on the Mental Capacity Act by the Office of the Public Guardian
10 July 2013, DBS Tower 2, Singapore
Fifty staff from LIA member companies attended the presentation.
Participants learnt how to handle individuals who may walk into Customer Service with an LPA in hand. Also as the population ages, service providers will need to train their personnel to interact with persons who lack or may lack mental capacity to make decisions regarding their financial affairs, but have not made an LPA (also referred to as a 'living will').
The Office of the Public Guardian (OPG) was set up to administer the Mental Capacity Act when it came into effect on 1 March 2010. The key functions of the OPG include establishing and maintaining registers of the Lasting Power of Attorney (LPA) and Court Orders appointing deputies as well as investigating complaints surrounding a person who lacks mental capacity.
Financial Services Managers Association Charity Bowl 2013
25 July 2013, Kallang Bowl Singapore
The FSMA Charity Bowl 2013 held at Kallang Bowl on 25 July brought together different companies and associations for an afternoon of bowling to accomplish a meaningful social project together. The objective was to contribute to society by raising $10,000 for Singapore Corporation of Rehabilitative Enterprises (SCORE). SCORE's mission is to enhance the employability of ex-offenders so as to prepare them for eventual reintegration into the workforce.
It was a fun-filled afternoon with camaraderie created in just four hours. The Guest of Honour was Ms Annette King, President of the Life Insurance Association Singapore. Also present were Tomas Urbanec, CEO of Prudential Assurance and representatives from SCORE, Teo Tze Fang, CEO, Ravi s/o Subramanian, Director Reintegration and Ms Juliana Binte Abdul Khalik, Deputy Director Reintegration.
Sponsors in alphabetical order were AXA Life, Great Eastern Life, IFPAS, Prudential and Tokio Marine Life.
Each sponsoring company/association both donated generously and fielded a team to compete in the bowling games.
So if you are wondering which team emerged top that afternoon, here are the results:
Great Eastern Life
Tokio Marine Life
|752, 706 & 733 - Total pin falls 2196
582, 565 & 575 - Total pin falls 1722
508, 466 & 514 - Total pin falls 1488
507, 466 & 469 - Total pin falls 1438
452, 432 & 390 - Total pin falls 1274
438, 385 & 354 - Total pin falls 1177
SAS Seminar on IFRS4
23 August 2013, Hilton Hotel Singapore
In collaboration with the Society of Actuaries - International Section, the Life Committee of the Singapore Actuarial Society (SAS) organised a one-day seminar on IFRS4 following the revised Exposure Draft published in June 2013. We saw a strong attendance of 90 insurance practitioners.
The seminar featured Peter Duran and Michael Lockermen as the speakers. They refreshed participants on the current IFRS4, touched on the building blocks to the measurement approach as well as shared key insights on the revised Exposure Draft.
There was also a workshop on contractual service margin, which was very well received.
The SAS Life Committee is pleased with the overall turnout and learning points and would like to thank the speakers and organising committee for the time and effort put in to ensure the success of the event.
Talk on the Competition Act by the Competition Commission of Singapore
29 August 2013, URA Centre, Singapore
Theme: Understand how competition law can help you
Thirty participants representing more than half of LIA member companies, comprising heads and managers from key functions - distribution, underwriting, actuarial, finance, legal, risk, compliance - were keenly attentive as the speaker, Herbert Fung (Director Business and Economics), delved into the CCS's guiding philosophy and principles, and core concepts and spirit of the Competition Act.
The Competition Commission of Singapore is a government agency responsible for championing competition. Our mission is to help create a vibrant Singapore economy with competitive markets and innovative businesses. CCS enforces the Competition Act by taking action against anti-competitive activities and its focus is on activities that have a significant impact on the economy.
At the same time, CCS also works with government agencies, business communities and the public to advocate pro-competition practices and promote a strong competitive culture and environment.
For further information, go to www.ccs.gov.sg
LIA Networking Evening
10 September 2013, Sol Tasca, Fullerton Waterboat House, Singapore
Our regular series of networking evenings again saw a record number of friends and associates turning up...cheers to more
IFPAS Education Roadmap Official Launch
27 September 2013, Singapore Recreation Club
As a major stakeholder in the industry, the Insurance and Financial Practitioners Association of Singapore (IFPAS) has always played an important role in the training of its members. This is evidenced in the plethora of programmes that IFPAS has rolled out for those interested in advancing their financial knowledge.
To prepare financial advisers for a bigger role in society, IFPAS initiated an industry-wide event called the "IFPAS Financial Education Roadmap" which provides the gateway for financial practitioners to embark on various educational paths to become more specialised practitioners and high-performing professionals and to better equip them to serve their clients and the community.
Some 100 representatives from life companies, CEOs, trainers and group affiliations attended the official launch event at the Singapore Recreation Club on 27 September 2013 which was graced by Ms Annette King, President of the Life Insurance Association Singapore.
In her address, Ms Annette King said, "The LIA has always been supportive of professional development of financial services professionals and will continue to do so. This is in part validated by the award of Continuing Professional Development (CPD) hours to courses which meet certain qualifying criteria and standards. LIA recognises that some aspects of professional development are best left to individual companies where company-specific practices and products can be acquired by the financial consultants. Other aspects of professional development should be done at the industry level especially where skills and knowledge acquired can serve a wider societal need or the specialised needs of consumers. LIA supports the IFPAS Financial Education Roadmap because it provides a clear pathway of choices for a financial consultant who wants to develop professionally. IFPAS Education's certifications are clear guide-posts for those who want to be equipped with practical skills and knowledge to serve his or her clients or the community better. LIA believes that the Education Roadmap will pave the way for the industry to mature as a profession and it will support the initiative in whatever ways it can."
"The IFPAS Financial Education Roadmap outlines initiatives and partnerships that will enable IFPAS to carry out its mandate to strengthen the skills of financial practitioners through, among other things, programmes provided exclusively or in partnership with other established professional and academic bodies" shared Roland Yeo, IFPAS Vice President for Education. Complementing Roland Yeo's overview of the Financial Education Roadmap, Bernard Lim, Principal of Wealth College presented the various pathways and specialisation choices of its programmes under the flagship of the IFPAS Financial Education Roadmap.
Befitting the occasion, the first batch of 15 Accredited Financial Counsellors were also present to receive their well-deserved certificates from the Guest of Honour.
Tokio Marine Life Insurance Singapore honours commitment to its customers
3rd quarter 2013
The best form of customer appreciation for a financial institution is to honour its commitments and place customers' interest at the heart of its business.
Tokio Marine Life Insurance Singapore remains the only life insurer in Singapore that has honoured all its bonus projections on participating policies since it was established in 1948. This commitment is reinforced through a public campaign in the third quarter of 2013.
As Tokio Marine Life Insurance Singapore's CEO, Lance Tay put it, "We strongly believe that our policyholders' financial security is our top priority. We have lived and breathed this maxim throughout our entire history. This "Honouring Commitment" campaign is really about showing our appreciation to our customers who have placed their trust in us. We are delighted to have delivered on our commitment to them."
The campaign features three longtime customers.
Coreen Chu Chai Yoon has been a customer since 1988. Her husband bought her a policy shortly after they got married. The policy matured this year and paid out a sum as projected when she first purchased the policy. Now, she has assured income for her retirement years.
Another customer, Khor Lock Khin, bought a policy in 1988. When the policy matured in April this year, he was delighted that the bonus portion exceeded the original sum assured.
Khor Loh Teng, elder brother of Lock Khin, also bought a policy at the age of 32 with the objective of saving up for when he turns 55 years of age. His policy matured two years ago and it returned 6% per annum, a rate that was beyond his expectations.
Tokio Marine Life Insurance Singapore's "Honouring Commitment" campaign communicated its core message through print advertisements, bus stop posters, public transport advertising, search engine marketing and digital platforms.
Looking ahead, Tokio Marine Life Insurance Singapore aims to continue this proud tradition.
Manulife Singapore launches Retirement Campaign
September - November 2013
Manulife Singapore launched an integrated retirement-themed campaign that highlights the thought-provoking question of whether one can maintain one's current lifestyle during retirement. The campaign focuses on basic comforts, simple pleasures and holiday plans which are affordable now, but may not be that easily achievable during retirement. It aims to make Singaporeans think about whether they can afford their desired lifestyle and also reiterates the point that with careful planning, it is possible to enjoy their desired lifestyle in their golden years.
Manulife's campaign focuses on three core groups - young family, mature family and pre-retirees. These groups are depicted enjoying their moments together and also raises the point of taking simple pleasures for granted. For example, a young family enjoys the comforts of maintaining their mobile and data plans but this cost can add up to $45,000 over 25 years, while a $6 breakfast set for two can add up to over $54,000 over 25 years. In addition, Manulife's Retirement microsite - www.manuliferetirement.sg has been enhanced with three video clips on daily, monthly and leisure needs, which illustrate more examples of living expenses.
To further educate Singaporeans on retirement planning, Manulife Singapore also produced two videos that draw out complex retirement planning concepts through a show-and-tell story. "Never Lose Sight of Your Retirement" and "Retirement Planning Made Simple" highlight the benefits of saving early through the compounding interest effect and show how diversifying savings can help beat inflation. These are found on the Manulife Singapore YouTube page - www.youtube.com/ManulifeSG1980 .
The island-wide key message is: "Secure today, secured tomorrow" with Manulife Retirement Solutions. The campaign, which runs to November, also injects a fun element, the "Indulging in my golden years" contest on Facebook - www.facebook.com/manulife.singapore. By choosing three of their top indulgences that they cannot live without even in retirement, participants will be entered into a lucky draw where two winners will walk away with $500 worth of shopping vouchers.
This second advertising campaign for the year also includes displays on MRT platform door panels and posters at Bishan, Dhoby Ghaut, Bras Basah, Tampines and Jurong East stations. In addition, there will be advertisements in Sunday Times and My Paper as well as on various digital platforms such as Yahoo!, AsiaOne and in a Straits Times application for iPhones and Android.
26th Pacific Insurance Conference
27 - 30 October 2013, Hong Kong
Theme: Winning Strategies for the Next Generation
26 days to go and counting down...
For more information and registration, go to www.pacificinsuranceconference.org