Types of Financial Advisers in Singapore
The Monetary Association of Singapore (MAS) regulates the financial advisory services in Singapore using the Financial Adviser Act 2002.
The purpose of the act is to streamline the types of financial services available for the consumers. Financial Advisory is a broad scope of services encompassing many categories, which include insurance advise, wealth accumualtion planning, investment advise, retirement planning and even estate planning.
Generally, there are 3 main groups of companies which you would come across.
- Life Insurance Agencies
- Licenced Financial Advisory Firms
- Banks
So what is the difference? It lies on the products which they are able to distribute.
| Life Insurance Agencies | Licenced Financial Advisory Firm | Banks | |
| What the industry calls the companies? | Insurance Companies | Financial Advisers | Banks |
| What the industry calls the intermediaries? | Insurance Agents | Financial Adviser Representatives | Bankers |
| Product Distribution | Limited to their companies | Through the distribution partners which are tied up | Through the distribution partners which are tie up |
| Consumer Choices | Limited | Can be extensive depending on the distribution | Usually limited with a few key partners |
As a consumer, you may be wondering, “Is it necessary for me to work with an adviser which carries multiple products distribution?” “I thought all products are the same?”
Well think of it this way, if you have a chance to do grocery shopping, do you shop at hypermart like Giant, Cold Storage etc, whereby you can pick up almost anything you want; or shopping at NTUC Fairprice at your neighbourhood (you can get some groceries there but with limited choices); or shopping at 7-11 store at your neighbourhood (you can still purchase some products there but with even fewer choices).
The main thing lies on the choices. As much as we want to have choices in shopping, we certainly deserve choices when purchasing financial products.
With hundreds of products out there in the market place, there are of course differences in terms of product features, limitations, charges, premium etc. Consumers should hire competent financial planners who are able to understand their financial situations before making a basis of recommendation. As such, what the financial planner is able to advise and what his/her company is able to distribute are both important considerations.
To get to know what products your adviser can distribute, always go to their companies’ website to look for their distribution partners before you decide if you want to engage them.
