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There is no law in Singapore that prohibits financial advisers from recommending other products that are not carried by their own principal. There is also no law prohibiting the financial adviser from charging a fee.
However, many insurers and IFA firms prohibit their own advisers from charging a fee. Why? There are two main reasons.
First reason: If advisers can charge a fee, they would have less motivation to sell products. Do you know that insurance advisers earn commission based on 3 – 6 years on a declining basis but product manufacturers earn perpetual revenues as long as their clients do not terminate the product? Are not these advisers fools to keep on selling when the one who ultimately benefits are the product manufacturers? Read more...