Cooling off period; extra care with elderly investors; better training
By
Fiona Chan
Banks are also re-examining the way they reward their sales representatives and will not assess their performance based on sales factors alone, said the ABS. -- PHOTO: REUTERS
BANKS are becoming stricter on how they sell investment products after the Monetary Authority of Singapore (MAS) found lapses in the sale of structured products linked to failed investment bank Lehman Brothers.
Just hours after the MAS released its investigation findings on Tuesday afternoon, the Association of Banks in Singapore (ABS) announced a raft of measures that the industry will put in place to protect the interests of consumers who buy investment products.
These include having a cooling-off period of up to seven days during which customers can cancel their investments. Banks such as DBS and OCBC introduced this last year.
Extra care will also be taken with elderly customers and those with low levels of education. These groups were identified as particularly vulnerable investors in the Lehman-linked notes debacle.
Bank tellers will not be allowed to refer customers to sales representatives who sell investment products. The representatives themselves will have to go through a more robust and specialised training programme, including a new examination the MAS is helping to design.
Banks are also re-examining the way they reward their sales representatives and will not assess their performance based on sales factors alone, said the ABS.
The association, which represents all banks operating here, will also step up education programmes for retail investors to make them more savvy.
The mismatch between investors' needs and what they were sold was the focus of the MAS investigation report released yesterday.
The 10 financial institutions that sold Lehman-linked products were found to have tripped up in areas such as assigning the correct risk rating to their products and customers, and ensuring that their sales representatives were properly trained and well-informed.
Most of the banks and brokerages involved issued statements on Tuesday saying they had already paid compensations to the relevant investors.
Read the full story in Wednesday's edition of The Straits Times.
