Life Insurance Association adopts guidelines on agent recruitment incentives

SINGAPORE - The Life Insurance Association (LIA) Singapore has gone ahead and adopted industry guidelines on recruitment incentives for financial advisers in Singapore, even as the Monetary Authority of Singapore (MAS) is in the midst of seeking views on the same measures that will address mass migration of a firm's agents.

The four measures include: Setting sales targets at a reasonable level, spreading out the payment of sign-on incentives over a minimum period of six years, pegging sign-on incentives to the persistency of policies serviced by the representative at the previous firm, and enhanced the 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 will apply when an insurer or its related financial advisory (FA) firm conducts mass recruitment.

According to the association, mass recruitment is defined as the movement of 30 or more representatives from the same FA firm within a 60-day rolling period.

MAS's public consultation will end on April 9.

These guidelines, which were co-created with the MAS, come after about 300 financial advisers from Great Eastern moved to rival AIA's newly set-up arm, AIA Financial Advisers, last year in one of the biggest migrations in recent years.

Commenting on these measures, the association's president Patrick Teow said: "Individuals do move between companies for career advancement, but customers' interests should not be adversely affected by such movements within the industry. This is why it is important to have guidelines to ensure that ethical, professional and responsible recruitment practices are being adopted."