Following the mass resignations at Prudential Singapore, there appears to be a bidding war for experienced financial advisers in the island nation as agent poaching intensifies.
Around 200 of the more than 400 agents from Peter Tan Organization (PTO), an agency unit of Prudential, have resigned. This gives smaller insurers and financial advisory firms a chance to enter the bidding fray.
A number of the agents that resigned are expected to join Aviva Singapore’s new financial advisory firm
, but it isn’t quite set in stone, as other companies have their sights set on this pool of agents.
Aside from the PTO situation, there have been aggressive buyouts and other major movements in the industry, and the Monetary Authority of Singapore (MAS) is concerned.
According to the MAS, its priority is to ensure the protection of customer interests, and it fears that policy switching may happen, where consumers are convinced by migrating agents to surrender their policies (sometimes with losses) and use the proceeds to purchase new policies with their agent’s new employer.
"MAS does not intervene in commercial hiring decisions, but seeks to ensure that FIs have appropriate measures and controls in place to ensure that customers' interests are protected, notwithstanding movements of representatives between FIs.
"FIs must also comply with MAS's market-conduct rules to safeguard customers' interests,” said the MAS.
The regulator also added that it requires financial institutions to uphold their hiring standards and that companies must monitor their hires for signs of improper switching or other undesirable sales practices. The MAS said that it will not hesitate to take regulatory action against companies that allow unfair practices at the expense of consumer interest.
As the industry’s agents and advisers earnings are entirely commission-based, insurers that cannot match market rates can have a tough time stopping rival firms from poaching their top performers.
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