STRATEGIC & TACTICAL ADVISORY RESPONSE (STAR) TEAM

IFPAS Strategic & Tactical Advisory Response (STAR) team is a dedicated ‘think tank’ designed to engage the regulators on wide ranging aspects & issues of the life & financial advisory industry in Singapore.

 

Leong Sow Hoe

Chairman

Leong Sow Hoe

Chairman

 

Roland Yeo

Member

Roland Yeo

Member

Maj (Ret) Dennis Tan BBM

Member

Maj (Ret) Dennis Tan BBM

Member

Mr Chan Keng Leong

Member

Mr Chan Keng Leong

Member

Michael Seow

Member

Michael Seow

Member

Frank Ng

Member

Frank Ng

Member

Wee Tiong Howe

Member

Wee Tiong Howe

Member

  • 2010 – Span of Control

    In 2010, the MAS introduced the Span of Control directive, limiting each manager to 15 direct agents and group managers to 10 managers. This move is against the spirit of free enterprise.

    Following the STAR team engagement, Mr. Lee Chuan Teck, Assistant Managing Director of the Capital Markets Group at MAS, agreed to look into this matter after the BSC was finalised. After the BSC had been finalised, the MASeased the Span of Control requirement and the discretion was left to the respective company CEOs.

  • 2012

    2012 – Formation of STAR Team

    The STAR team was formed in response to the sudden launch of The Financial Advisory Industry Review (FAIR) by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore (MAS), during the 50th Anniversary dinner of Life Insurance Association (LIA) Singapore.

    The STAR team represents the alliance of IFPAS, FSMA and the guilds of the various insurance companies.

    The FAIR aims to enhance the standards and professionalism of the FA industry and improve efficiency in the distribution of life insurance and investment products in Singapore. The FAIR Panel focused on five key thrusts:

    (a) raising the competence of FA representatives;
    (b) raising the quality of FA firms;
    (c) making financial advising a dedicated service;
    (d) lowering distribution costs; and
    (e) promoting a culture of fair dealing.

    Over the following years, the team engaged MAS and the stakeholders tirelessly to overcome the threats.

  • 2013

    2013 – Industry Remuneration Structure (FAIR Thrust 4)

    After numerous meetings, the MAS agreed to retain the commission remuneration structure and the three-tier structure instead of the proposed fee-based remuneration structure and two-tier structure.

    In line with the commission remuneration structure, the MAS proposed a deferred payment system but the STAR team found that this will result in a reduction of total compensation. Thus, STAR team counter-proposed to maintain the existing maximum First Year Commission (FYC) of 50%, to which the MAS reverted with 55%.

  • 2013

    2013 – Balanced Scorecard (BSC) Framework

    The purpose of BSC is to promote good behaviour and to encourage FA representatives to provide quality advice and suitable recommendations.

    The four (4) KPIs in this framework are:
    (a) understanding customers’ needs;
    (b) suitability of recommendations;
    (c) adequacy of information disclosure; and
    (d) standards of professionalism and ethical conduct.

    Those found with infractions will be penalised financially. The STAR team achieved a major victory by convincing the MAS to adopt clawing back of commissions instead of withholding the commissions.

    The STAR team upheld the principle that everyone is “innocent until proven guilty.”

  • 2013/14

    2013/14 – Direct Channel Sales or Direct Purchase Insurance (DPI) (FAIR Thrust 5)

    MAS FAIR panel proposed that consumers can purchase directly from insurance companies, without financial advice and without commission charged. (direct purchase products).

    The STAR team managed to narrow the products to term life insurance products with total permanent disability (TPD) and traditional whole life insurance products with TPD, with an option to cover critical illnesses.

  • 2016/17

    2016/17 – Bundle Product Disclosure (BPD) (FAIR Thrust 5)

    The BPD gives the consumer a choice of a cheaper alternative to the whole life or endowment plan, by compelling insurers to display the DPI in the business illustration.

    It is not fair anddefinitely controversial to compare products that are sold with advice with those that are bought without advice, for agents to show the DPI that they are not responsible for.

    The inclusion of Direct Purchase Insurance (DPI) was a total surprise to the STAR team and they were strongly against it.

    The STAR team had many fruitless meetings with the MAS for DPI to be removed. This matter was then raised to Deputy Prime MinisterTharman Shanmugaratnam, who was convinced and DPI was eventually removed.