It seems that the recent speech by the Managing Director of MAS has triggered a strong response from the industry. I guess it is because he mentioned points that will have a significant impact to the industry like raising the entry criteria from the current 4 'O' levels to keep up with current education trends and removing commission based sales to fee based structure.
Some opinions I heard include:
- "Oh no, it is going to mean more exams and paperwork."
- "It simply will not work! Customers will not pay a fee. They have been so used to receiving free advice."
In my opinion, raising the entry criteria is only keeping up with the current education standards. Most of the population is at least a diploma holder. At least, it will make the industry seem a little more professional as this point is often poked fun at with comments like "If you only have 4 O levels and cannot find a job, just go and be an insurance or property agent.". That speaks volumes of the image of this profession.
As for the second point about the reduction of cost, the suggested approach of removing commission based sales will be a real interesting to see how it will be played out:
- What will happen to existing managers enjoying all the overriding
- How will the fee be determined
- If online avenue is available, what is going to stop people from getting "free" advice from commission based agents and going online to purchase themselves
- The insurers themselves need to buy in to this structure and at the same time, not anger their source of income - their self employed business agencies
- There is currently, no proper education system or qualification on knowledge in areas like trust, CPF, mortgage loans, government grants and schemes
Well, I do feel what is shared is a step in the right direction. However, my fear is that it becomes "no action talk only". In addition, the hurdles faced by Financial Advisory Industry Review (FAIR) are going to be very challenging so even if it is going to happen, it may take a really long time. So in the near future, everyone can still rest easy and focus on Business As Usual.
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