Singapore's answer to the UK's Retail Distribution Review and Australia's Future of Financial Advice, has been announced.

The Monetary Authority of Singapore has said it
will conduct a review of the financial advisory industry that could
fundamentally change the way wealth management is conducted in the city-state.

Singapore's watchdog wants to enhance the
professionalism and competence of financial advisors, and create a more
competitive and efficient system for distribution of life insurance and
investment products, said MAS managing director Ravi Menon at the Life
Insurance Association 50th anniversary dinner, in a transcript published on the
MAS website.

The review will look at a wide range of areas
from the entry requirements of financial advisers to their compensation and
distribution structure of products. 

The MAS will set up a review panel to look at
five areas where it will propose changes. The whole process which will be known
as Financial Advisory Industry Review, or FAIR, he said at the dinner in the
Raffles City Convention Centre. The members of the review panel will be announced
shortly. 

"We are far better at earning an
income than investing it and protecting against risk," said Menon. 

"Many life insurance and investment
products are often not easy to understand. Many people are not financially
savvy. And many of those who are, do not have the time to review the
range of insurance and investment products available, and understand what is
best suited for their needs. This is where financial advisory service
comes in.  Financial advisors can help people identify their insurance and
financial planning needs and recommend suitable products."

Menon said that product knowledge of
financial advisors must be improved through training and that the MAS would
raise the entry requirements in the sector.

"We have introduced new examination
modules to ensure that FA representatives have sufficient knowledge of the wide
and complex range of investment and insurance products currently available in
the market," he said.

"MAS will review the minimum level
of qualifications that we expect of our FA representatives, to ensure they stay
relevant to the needs and expectations of consumers,” said Menon.

He also outlined plans for lowering
distribution costs and increasing transparency, pointing at the UK’s RDR and
Australia’s FOFA regulations, as a model.