C.A.P.S CHAPTER ONE

A. Factor of Consideration No. 1 - The financial adviser representative must be appropriately licensed by MAS (Monetary Authority ofSingapore)

1. The firm he is representing – In Singapore, a representative could be from either one of thefollowing:

S/ No

Types of Company

Strengths

Weaknesses

1.

Insurance company
  1. Good knowledge & support of own company’s products & claimprocesses.

 

  1. Strong capital base.

1.Product range is limited to single company which can limit the width & depth of the financial plan.

2.

Insurance Company     owned Financial Advisers Firms
  1. 1. Wider product ranges from various insuranceand investment companies.

 

  1. 2. Strongcapital base.

1. Product range is dependent on the number of insurance &investment companies which the firm onboard.

3.

Privately owned Financial Adviser Firms

1. Widest product ranges from various insurance               and investment companies.
  1. Weaker capital base compared to insurance & insurance company’s FA firms. Firm might face cashflow issues during      challenging economic environment & rising cost of business.

 

Business continuity is highly dependent on shareholders’ preparedness on death, disability, retirement or special situations like bankruptcy,     divorce, loss of mental capacity of eachshareholder.

4

Bank
  1. Offer    deposit, credit, and  loan products in addition to insurance and investment products.

 

Strong capital base
  1. Usually perform single needselling.

 

  1. Product ranges are limited to the ones carried bybank.

Bank has right of consolidate all the client’s accounts and set-off outstandingdebt owed to thebank.

 

B. Factor of Considerations No. 2 – The licensing activities which the representative can do

1. In Singapore, the following are the licensingactivities:

 

S/No.

Type of Licensing Activities

What it means

1.

Arranging contracts of insurance in respect of life policies

Rep can arrange life policies.

2.

Advising on investment products (life policies)

Rep can advise on life policies                              including investment                                      linked policies.

3.

Advising on investment products (units in a collective investment scheme)

Rep can advise on unit trust, mutual funds and ETFs.

4.

Advisingoninvestmentproducts (securities)

Rep can advise on bonds and securities.

 

C. Factor of Consideration No. 3 – Professional Education

It is important to deal with a competent financial adviser rep as you are dealing with money matters. Having or working towards a professional designation is a good sign that this rep is serious in his trade. The followings are some of the good and credible designations to watch out for:

 

1. Associate Financial Consultant (AFC) – This designation is awarded by Insurance & Financial Practitioners Association of Singapore (ifpas). It is a basic financial planningqualification.

2. Chartered Financial Consultant (ChFC) – This designation is awarded by the Singapore College of Insurance (SCI) under the license of The American College of Financial Services. It is an advance financial counselling and servicesqualification.

3. Fellow Chartered Financial Practitioner (FChFP) – This designation is awarded by the Asia Pacific Financial Services Association (APFinSA). It is an advance and application based financial planning qualification.

4. Chartered Life Under writer(CLU)-This designation is awarded by the Singapore College of Insurance (SCI) under the license of The American College of Financial Services. It is an advance life insurance qualification.

 

d. Factor of Consideration No. 4 – Member of a Professional Association

1. All professionals will associate themselves with an association and abide by the ethical codes of that association and participate in continuous professional development courses in that association. A financial adviser rep shouldbeamemberofgoodstandingwiththelocalchapterofaprofessional association, for example, the Insurance and Financial Practitioners Association of Singapore(IFPAS)

 

CONSUMER RIGHTS

Financial planning has to be dealt with carefully, and also openly to a trusted financial adviser rep. The consumer has the following rights: