News in Brief - Caproasia Online | The leading source of data, research, information & resource for financial professionals, institutional investors, professional investors and private investors (UHNWs, & HNWs). Covering capital markets, investments and private wealth in Asia. How do you invest $3 million to $300 million? How do you manage $20 million to $3 billion of assets?

This site is for accredited investors, professional investors, investment managers and financial professionals only. You should have assets around $3 million to $300 million or managing $20 million to $3 billion.

Monetary Authority of Singapore Proposed Financial Advisory Recruitment Measures, Targeting Sign-on Incentives & Mass Movements

The Monetary Authority of Singapore (MAS) has proposed 4 measures to address the risks associated with large scale movement of financial advisory (FA) representatives from one FA firm to another.  The 4 measures aim to promote more responsible recruitment practices in the FA industry.  The Central Bank has called for a public consultation, which will end on 9th April 2018.

” Singapore Central Bank Proposes Responsible Recruitment Practices “

Mass recruitment of representatives by FA firms from competitors recently was accompanied by sizeable sign-on incentives.  Much of the incentives are paid up-front and tied to sales targets. These increase the risk of FA representatives engaging in aggressive sales tactics meet the sales targets and retain their sign-on incentives.

The offer of large sign-on incentives may also drive up costs in the industry.  Singapore’s Central Bank (MAS) has made it clear that financial incentives to recruit representatives cannot be charged to the insurance funds as an expense.

The public consultation will end on 9 April 2018. More details can be found on the MAS website through this link.


The 4 Proposed Measures 

(a) and (b) applicable only if sign-on incentives are pegged to sales targets

a) First Year Sales Target (Tied to Incentives) Cannot be Higher than the Average Annual Sales in the Last 3 Years

The first year sales target tied to sign-on incentives should be no higher than the representative’s average annual sales in the preceding 3 years. Sales targets for subsequent years should be set at a reasonable level based on the representatives’ past performance, and would be subject to supervisory review by MAS.  This measure mitigates the risk of representatives engaging in aggressive sales tactics to meet inflated sales targets.

b) Sign-on Incentives Spread Over at Least 6 Years

Sign-on incentives should be spread over a minimum period of 6 years. The first year payment should be capped at 50% of the representative’s average annual remuneration in the preceding 3 years. The remaining sign-on incentives are to be spread evenly over the next 5 or more years. This measure fosters better after-sales service to customers as the payout of incentives may be withheld if a representative is subsequently found to have engaged in improper sales conduct.


(c) and (d) applicable only if 30 or more representatives move with 60 days rolling period

c) Sign-on Incentives to be Clawed Back if Policies Persistency Ratio Drops Below 75% to 85%

FA firms will be required to claw back the representative’s sign-on incentives if the percentage of insurance policies serviced by the representative at his previous FA firm and which remain in force, falls below a certain threshold2 two years after the representative’s departure.3 This measure deters representatives from encouraging customers to surrender existing insurance policies and to buy new ones from the new FA firms, without due consideration of whether the switch is suitable.

d) Enhanced Sales Monitoring by 3rd Party (Call Verification) for at least 2 Years

FA firms will be required to undertake enhanced monitoring of their newly hired representatives’ sales transactions for a minimum period of 2 years. This includes appointing an independent external party to conduct customer call-backs to verify that the sales and advisory process has been properly conducted.


1 Measures (a) and (b) will apply whenever a representative is offered sign-on incentives pegged to sales targets, whereas (c) and (d) will apply only to the mass movement of 30 or more representatives from one FA firm to another within a 60-day rolling period.

2 The threshold is set within the range of 75% to 85%.

3 This measure relates to the persistency ratio, which refers to the percentage of regular premium life and accident & health policies that remain in force without lapsing or being replaced by another policy.


Source: Official Press Release


About Monetary Authority of Singapore

Monetary Authority of Singapore
Monetary Authority of Singapore

Monetary Authority of Singapore (MAS) is Singapore’s central bank, which was formed back on 1 January 1971. It promotes sustained, non-inflationary economic growth through appropriate monetary policy formulation and close macroeconomic surveillance of emerging trends and potential vulnerabilities. MAS manages Singapore’s exchange rate, foreign reserves and liquidity in the banking sector. It is also an integrated supervisor overseeing all financial institutions in Singapore — banks, insurers, capital market intermediaries, financial advisors, and the stock exchange.

  • Origin : Singapore
  • Assets : USD 385.12 billion
  • Revenue : USD 1.89 billion

Official Website:

News & Media: Press Release

Updated on 8th August 2016 | The leading financial website for financial professionals, professional investors and HNW investors. Covering capital markets, investments and private wealth in Asia. How do you invest $3 million to $300 million? How do you manage $20 million to $3 billion of assets? Quicklinks: Caproasia Access | TFC | Caproasia | Jobs

Join 14,000+ leading financial professionals and professional investors in Asia. Stay ahead of your peers & competition.
For press release, email to
For editorial, media kit, listing on TFC, events, seminars or research & data services, email to

Previous articleNatixis Asset Management Renames as Ostrum Asset Management
Next articleBank of Singapore Hires Anthony Simcic as Managing Director for International Team covering capital markets, investments and private wealth in Asia. Our users manage, advise & invest $25 trillion assets in Asia