The Life Insurance Association (LIA) Singapore has gone ahead and adopted measures aimed at addressing recruitment incentives for financial advisers even as the Monetary Authority of Singapore (MAS) is in the middle of seeking views on these same measures.
The guidelines, which were co-created with the MAS, will apply to LIA members and their related financial advisory (FA) firms.
The four measures are: setting sales targets at a reasonable level; spreading out the payment of sign-on incentives over a minimum of six years; pegging sign-on incentives to the persistency of policies serviced by the representative at the previous firm; and closer monitoring of representatives for at least two years.
The first two measures apply to all representatives who are offered sign-on incentives tied to sales targets or a transition package, while the latter two measures will apply when an insurer or its related FA firm conducts mass recruitment.
According to LIA, mass recruitment is defined as the movement of 30 or more representatives from the same FA firm within a 60-day rolling period.
These guidelines come after about 300 agents were poached from Great Eastern last year to join AIA subsidiary, AIA Financial Advisers, in one of the biggest such migrations in recent years.
Commenting on the measures, LIA's president Patrick Teow said: "Individuals do move between companies for career advancement, but customers' interests should not be adversely affected by such movements...This is why it is important to have guidelines to ensure that ethical, professional and responsible recruitment practices are being adopted."
MAS' public consultation ends on April 9.