Insurer Singlife launches shared services for Singapore financial advisers

SINGAPORE - Insurer Singlife has set up a shared services hub to support financial advisers in Singapore, in a move that is starting to gain ground in the industry as financial advisory (FA) firms are expected to become the preferred sales channel.

The composite insurer, which is a fully owned subsidiary of Sumitomo Life, said on Jan 2 its shared services hub is designed to enable financial advisers to start their own firms.

Called Propel, the hub now has a team of almost 100 staff and will provide services like electronic financial needs analysis, client onboarding, commission tracking, as well as operational and administrative support.

Incorporated in September 2023, Propel has so far signed up more than 230 advisers from across seven FA firms, such as Alpha Wealth Financial Advisers.

The FA firms that join the hub have to pay an undisclosed monthly tech platform fee, on top of the fees for services they sign up for.

Led by Propel chief executive Steven Ong, the hub is looking to take on a further 700 advisers in 2025, with the goal of hitting 3,000 advisers by 2029.

Under what the composite insurer said is an “open architecture” model, advisers who use the shared services hub are not obliged to sell Singlife’s products.

Still, the insurer expects the shared services business to help it grow its overall sales.

“By providing comprehensive support to FA firms, Propel supports the trend of tied agents transitioning to non-tied models, unlocking opportunities for increased sales across the FA channel. The anticipated boost in overall sales generated by the FA firms that Propel supports translates into growth for Singlife’s overall sales,” it said.

Singlife estimates that FA firms are primed to become the main sales channel in Singapore as consumers prefer a variety of products.

The FA channel is expected to grow at a rate of about 13 per cent per annum over the next few years, it said.

In the first nine months of 2024, data from the Life Insurance Association (LIA) Singapore showed that financial advisers contributed to 32.7 per cent of new business weighted premiums.

This was slightly behind bank representatives’ 33.1 per cent and ahead of tied agents’ 29.9 per cent. Tied agents can sell only products from specific insurers.

While there are some who caution that Singapore’s market is small and saturated, LIA’s data showed growth – the industry recorded a total of $4.3 billion in weighted new business premiums in the first nine months of 2024, up 23.5 per cent year on year.

This indicates growing demand and room for financial advisers to narrow protection gaps, Singlife said.

A poll the insurer conducted among 102 tied agents from May to June 2024 found that the lack of an efficient software system is a key challenge in setting up a new FA firm.

Some industry players have said before that technology and compliance are particularly costly for new FA firms, so there exists a gap in the market to provide such services to these.

Ms Pearlyn Phau, Singlife’s group CEO, said: “By enabling advisers to operate outside tied channels and deliver tailored, unbiased advice, we’re driving a more dynamic, transparent and customer-focused industry that benefits everyone.”

Three weeks ago, The Straits Times reported that local insurer Income Insurance had in August 2024 set up a subsidiary called Income Advisory Group (IAG) to be a business partner to those who want to start their own FA firms.

The FA firms who use IAG’s shared services can choose to sell either just Income’s products or also offer plans from other insurers.

Unlike Singlife’s model, IAG is expected to take a stake in the FA firm.