Singapore: MAS sets out expectations for recruitment and onboarding of financial representatives

MAS has published an information paper setting out standards that it expects financial institutions to apply when assessing whether their appointed representatives are fit and proper to carry out regulated activities. The paper is based on findings from a thematic review conducted on four FIs regulated under the Financial Advisers Act between 2024 and 2025, which examined the FIs' controls, policies and procedures for representative recruitment and onboarding training.

Whilst MAS observed that FIs generally have frameworks to assess the fitness and propriety of their representatives and conduct onboarding training, deficiencies were identified across several key areas. 

It will be crucial for financial institutions to review their recruitment and onboarding processes to ensure they meet MAS's heightened expectations in this area.

Key supervisory expectations

Onboarding of representatives

FIs must have structured recruitment policies and processes, approved by senior management, covering a rigorous due diligence process, taking guidance from MAS' Circular on the relevant checks and documentation to verify that individuals are fit and proper for appointment as representatives. 

FIs should refrain from appointing representatives with adverse information as supervisors unless the associated concerns are adequately mitigated.

Monitoring of representatives with adverse information

FIs should establish a robust framework to identify and monitor representatives with adverse information, approved by senior management, which designates appropriate independent personnel or establishes a forum with authority to approve, modify or remove monitoring measures.

FIs should implement monitoring measures that exceed standard monitoring mechanisms established for all representatives. These monitoring measures should be specifically tailored to address the risks associated with the particular nature and severity of the adverse information identified.

Onboarding training

FIs should train and assess the competency of representatives and supervisors prior to allowing them to provide financial advisory services or assume supervisory responsibilities respectively.

FIs should evaluate the scope and appropriateness of training programmes, whether conducted by internal or external parties, and review and approve training materials used.

Other areas

Hiring of assistants: FIs should institute monitoring mechanisms to ensure assistants hired by representatives do not engage in regulated activities, clearly outline specific tasks, and restrict assistants' access to information on a need-to-know basis. 

Outsourced activities: The Guidelines on Outsourcing (FIs other than banks) require FIs to ensure effective oversight of outsourced arrangements and implement adequate controls to address outsourcing risks. 

Next steps

FIs should benchmark their current policies, processes and procedures against the supervisory expectations and good practices in this paper, and take action to address any identified gaps. The regulatory landscape is tightening, and firms that act now will be better positioned to meet MAS's evolving standards whilst safeguarding their reputation and client relationships.