What is a Financial Adviser?
The Financial Advisers Act of 2002 spells out the definition of a Financial Adviser in Singapore. (Legally in FAA, “Financial Adviser” refers to the company and “Financial Advisory Representative” refers to the individual. For purpose of discussion, we will us the accepted term of “Financial Adviser” as the individual)
Some professions previously not considered Financial Advisers are also grouped under the title. To know more about the legal framework that governs the term Financial Adviser proceed to Financial Advisers Act (FAA).
3 types of Financial Advisers included in Singapore
* Agent of a Life Insurance Company
He represents one life insurance company and advise you on the products of that company. He may also advise you on the products of other financial institutions as long as his company has agreement to distribute those products.
* Employee of a Bank or Other Financial Institution
He represents one bank or one other financial institution and advise you on the products of one or more product companies with whom the bank or financial institution has an agreement to distribute those products.
Financial institutions include banks (OCBC), securities firms (Kim Eng) and finance companies (Hong Leong).
* Licensed Representative of a Financial Adviser Firm
Licensed by the MAS individually, Financial Adviser advice on the products of life insurance companies and financial institutions with whom the Financial Adviser Firm has agreement to distribute those products.
Find out more about Independent Financial Advisers (IFAs)
As you can see, the title Financial Adviser is broadly used. Read more about “Shortcomings of the current Financial Advisers Act”
Financial Adviser’s income
FAs are generally paid in 2 ways. If a FA charges you a fee, the firm must disclose details of the charges at the outset. If a FA receives commissions, it must disclose to you the amount of commissions it receives.
Other than the payment in fees, FAs are not allowed to handle clients’ money. Any payment for products should be made out to the name of product provider.
Managed Wealth Singapore believe that since the term “Financial Adviser” has been corrupted. A professional in the business of Wealth Management should be termed “Wealth Manager”. Find out more about what is a “Wealth Manager”
