SINGAPORE: The Monetary Authority of Singapore (MAS) and the Life Insurance Association Singapore (LIA) are launching a public consultation on promoting responsible recruitment practices in the financial advisory industry.
Speaking at the LIA's 16th luncheon on Wednesday (Mar 7), MAS deputy managing director of financial supervision Ong Chong Tee said the mass recruitment of insurance agents by one firm can give rise to heightened market-conduct risk, such as aggressive sales tactics and improper switching.
Mr Ong said LIA members have agreed to some of the measures proposed in the public consultation, which includes imposing a sales target cap for agents in their first year after switching to a new financial advisory firm.
This reduces the pressure on them to engage in aggressive sale tactics to meet inflated sales targets, he added.
This comes after recent reports on the aggressive sales tactics and mass poaching of insurance agents from rival insurers in Singapore that has cast the industry in an unfavourable light.
Financial advisory firms are also required to monitor the sales transactions of their representatives. This is to ensure that the sales and advisory process have been properly conducted.
AdvertisementAdvertisementMr Ong said: "Insurance is a social good, not a mere financial or economic activity.
"Apart from the imperative of doing well, it is also important for the industry to be guided by (a) moral compass pointing firmly to doing right and doing good," he added.
In September 2017, about 300 agents from Great Eastern's agency unit Advisors Alliance Group hopped over to the then newly formed AIA Financial Advisers.
The exodus eclipsed an earlier recruitment exercise in 2016, when 250 agents at Prudential Singapore's agency unit - Peter Tan Organisation - resigned to join rival insurer Aviva.
In an interview with Channel NewsAsia last November, Singapore chief executive for British insurer Prudential Wilf Blackburn said that customers are likely to get the short end of the stick from such poaching battles as insurers may increase premiums or reduce cash values to offset costs.
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