For those who weren’t at the LIA dinner, Menon, who is managing director of the Monetary Authority of Singapore, announced in his speech the launch of a major review of Singapore’s advisory industry, which in turn has prompted much contemplation of where we are now – and where we are going.
Since a new regulatory appointment “framework” took effect here in November 2010, the term “FA appointed representative” has incorporated financial advisers as well as tied agents and bank distribution employees. The increase in professionalism and raising of the entry and maintenance standards that occurred at that point, and which – to judge by Menon’s speech – evidently is set to continue, is consistent across all jurisdictions that are driving similar changes.
Whether or not it is transforming the business of giving financial advice to consumers is a contentious subject at the moment, however.
For now, though, it is safe to say that there is still a huge gap between those at the top of the profession and those who, with access to fewer resources because of the nature of their clientele and practice, may not be able to be judged of a “professional” standing.
What also emerged from Menon’s speech, both directly and indirectly, is that the regulators are increasingly speaking with each other, and adopting one another’s most successful ideas.
A willingness to look at how things are done well elsewhere, and adopt the best, has been ingrained in Singapore since its modern era began in 1965, but it is interesting to see how this philosophy of adoption and practice sharing is also taking place between London and Canberra.
Hong Kong has traditionally looked to Britain, but now is more often looking to China, to guide and adapt its current structures to emerging requirements.
The single regulator model of Singapore, meanwhile, allows for more streamlined and smoother change, compared to jurisdictions like Hong Kong that have more layered models and multiple regulators. This may be seen as giving Singapore an edge over its great regional competitor, Hong Kong.
Beyond jurisdictional issues, the increasing globalisation of the advisory industry is being reflected in the increased accessibility of information for consumers, and therefore the increased education and sophistication of clients, as well as for practitioners and regulators.
This will not necessarily mean the creation of a homogenous global regulatory framework, though, as each country will adopt what they deem as best practice, (i.e. most relevant) for their cultures and markets.
The difficulty regulators will face is identical to what multinational organisations typically grapple with: how to sift through ideas and work out which practices in one country are actually relevant, applicable, transportable and acceptable in another country.
That regulators are willing to learn from each other and ‘plagiarise’ rather than reinvent is, though, a positive.
What we do expect to see are common themes applied in country specific ways, a general raising of standards globally, and an inevitable bumpy road as new frameworks are tested and regulators, and financial advisers continue to learn from each other around the world.
David Bellingham is director of Professional Investment Advisory Services in Singapore.
