What consumers say will affect how they are rewarded under new system
CONSUMERS have a vital role in providing feedback on the performance of their financial advisers, industry bodies say.
A new system this year means the pay for financial advisers and their supervisors will be tied to non-sales key performance indicators as well.
They now stand to have their variable remuneration docked if they fail to make suitable recommendations or disclose information as required to their clients.
But without that crucial consumer feedback, the new system will fall flat. The system is intended to lift standards in the financial advisory industry covering banks, life insurers and financial advisory firms.
The call for consumers to step up was made yesterday by the Association of Banks in Singapore (ABS), Life Insurance Association of Singapore (LIA), and Association of Financial Advisers Singapore (AFAS).
Consumers will be asked in phone calls, or via written or e-surveys, or in face-to-face meetings to evaluate recent experiences of buying investment or insurance products.
ABS' director Ong-Ang Ai Boon said: "We seek the cooperation of clients to respond to banks when such feedback is sought. This will help to enhance the standards of professionalism and proper conduct, which will ultimately benefit all clients."
The move to introduce client feedback is part of a new requirement that banks, life insurers and licensed financial adviser firms will be implementing, under the "balanced scorecard framework" later this year.
This balanced scorecard refers to the inclusion of factors such as customer feedback in rewarding financial advisers. Currently, advisers are mostly paid based on their sales results.
The framework was one of the policy proposals of a consultation paper released by the Monetary Authority of Singapore (MAS) on Oct 2 last year.
A consultation paper on the Financial Advisory Industry Review was released by MAS on March 5 in 2013, followed by a response by MAS on Sept 30 the same year.
AFAS president Vincent Ee urged consumers not to brush off attempts to get feedback, "as this would prevent the industry from effectively implementing the objectives of the balanced scorecard framework".
He said that the support from consumers will aid in boosting the industry's "professionalism and competency level".
The enhanced framework aims to encourage industry players to continue to provide quality advice and make appropriate investment recommendations.
Ms Pauline Lim, LIA's executive director, said: "Based on feedback shared, the life insurance industry in Singapore will implement additional efforts to improve quality of service as we continue to help individuals better meet their long-term protection, savings, investment and other financial needs."
She said LIA hopes to work closely with everyone to elevate industry standards, and to reinforce Singapore's position as a regional financial powerhouse.
Undergraduate Rendall Cheah, 25, said he would like to give his feedback if asked.
"The idea is good, to give feedback on insurance agents of the banks, insurers and financial advisory firms, as this would show that the companies are making an effort to keep track of their staff performance and services delivered."