THE Monetary Authority of Singapore (MAS) has ordered three insurance brokers to cease providing financial advisory services for new transactions by Tuesday.

The central bank had found that Acclaim Insurance Brokers, Leadenhall Insurance Brokers, and Magnetron Insurance and Financial Services did not have adequate management oversight nor control policies and procedures for their financial advisory operations.

The brokers, which are middlemen between clients and insurance firms, were also found to lack adequate monitoring of the conduct of their representatives or introducers and complaints investigation and resolution process.

In a statement yesterday, MAS said that it will withdraw the three firms' exemptions - under certain provisions of the Financial Advisers Act (FAA) - from the requirement to hold financial advisers licences.

Under the so-called single licensing regime, the companies are exempted from the requirement to hold a financial adviser's licence pertaining to the provision of financial advisory services, MAS said.

With the withdrawal of the exemption by MAS, they will no longer be permitted to provide such services here.

'[We're] withdrawing the exempt status... on the grounds of their contraventions of the FAA and in the public interest,' MAS said on Monday.

Industry watchers recall that at least two of the troubled firms made the news last year.

Former financial advisers from Acclaim Insurance Brokers flocked to the firm's Keppel Road office in August last year to claim their unpaid commissions, but were turned away.

Around the same time, reports surfaced that funds of about 2,000 clients of Acclaim's financial advisory arm were shifted to Leadenhall Insurance Brokers without their consent.

This was after 26 financial advisory representatives left Acclaim to work at Leadenhall's new financial advisory arm.

'There're certain regulatory issues we were aware, and moving forward, we'd rather things don't repeat themselves,' Acclaim chief executive Anthony Lim told The Straits Times.

Mr Lim, who is also the president of the Singapore Insurance Brokers' Association, said that Acclaim has stopped its financial advisory business two months ago, and that it is now focusing on its core general insurance business.

MAS said that it has directed the trio to ensure all outstanding order instructions and applications received from clients and monies held on behalf of clients are forwarded to the relevant parties.

The status of the life insurance policies of clients of the three firms and the premiums paid under such policies to them will also not be affected.

Clients of the three firms who have any queries on their investment accounts should contact their respective insurance broker or platform provider, MAS said.