MAS response point 3.3: Fair and Balanced Marketing and Advertising Materials

I was just reading up on the MAS paper on my mobile phone after my meeting while making my way down to the COMEX show at Suntec City. The restrictions does makes the whole sales process a whole lot more challenging to say the least, but I was simply wondering how they are going to enforce it. Sure, its one thing for PRINTED materials to go through the compliance checks etc, but what are they going to do if the sales rep does not even show the customers the printed material, but instead relying simply on speech itself.

At the COMEX show itself, I noticed a group of well-dressed youth standing around with holders containing pictures of PSP, WII, mobile phones etc but with no price tags on them. (The pics, not the youths) As they happen to be standing right next to the booth I was testing the printer I am interested in buying, I overheard one of them approaching a gentleman beside me if they are interested in getting the gadgets in the pictures for free. Obviously, the gentleman was keen on the 'free gift' and proceed to ask her what he must buy to qualify for the gift. (At least he knows that there are no free lunches)

However, the lady in question left me pretty shocked with her answer and I this is the conversation as best as I can remember,

Lady with picture (LP): "Oh, no need to buy anything, we're not selling any products today, just a promotion for savings account."

Interested Guy (IG): "Savings account? So good? Which bank?"

LP: "Oh, we're not from the bank. Bank's interest rates are so low, less than even one percent! Not only are we giving you the free gadget, this account gives you a much higher interest rate any banks!"

IG: (Starting to get wary) "Got so good one meh? What's the catch?"

LP: "This account is really very good one, no catch. We help you to do regular savings so that you can earn higher interest! Why not you follow me, I show you the brochure and explain to you more in detail."

The conversation ended with the guy following the lady somewhere into the crowd. I didn't catch which booth they ended up in, but I am very sure that the lady is from an insurance company, trying to sell either a endownment plan or an investment linked policy (ILP). I'm left feeling very uneasy about the whole incident as these incidents have a direct impact on me as well as I am in the same industry.

My uneasiness arises first of all from the fact that this particular group of people are lurking at other vendors booths, presumably due to the fact that if they are standing under their own booth, customer would tend to give them the wide berth as their intention today was probably more on IT devices, and lets face it, most people do not want to talk to any insurance agents or financial planners as they always think that this group of people only wants their money. I would know, since I've been on the receiving end, so please make it clear that I'm not against any insurance agents or companies etc so I am also one of YOU! But I believe in carrying out business in an ethical way, as I also strongly believe that insurance DOES benefits the customers at the end of the day, and its our job to educate and make them see that. Not dusting the issue under the carpet and 'repackage' the product into something its not but you think customer will like.

In addition, MAS response point 3.3 sub-section Fair and Balanced View of Products states that

In response to concerns regarding the interpretation of “fair and balanced”, MAS will take into account the following factors in determining whether marketing and advertising materials are “fair and balanced”. Marketing and advertising materials would be considered “fair and balanced” if they:
(a) are clear and easily understood by the audience being addressed; 6
(b) set out clearly both the potential upside and downside of the investment;
(c) highlight prominently the risks of the product;
(d) do not give the impression that an investor can profit without risk;
(e) do not present information in footnotes if such presentation would cause difficulty to an investor in understanding the product; and
(f) do not omit any material information if the omission would cause the marketing and advertising materials to be misleading.

By enticing the potential investor with pictures of gadgets with no inkling of any products that they are trying to sell, or that they are in fact free gifts for signing up on an insurance plan does not seem fair to me.


MAS response point 3.3 sub-section Restrictions on Marketing and Advertising Materials also states that

In addition, MAS proposed that marketing and advertising materials should not suggest that:
(a) the product is, or is comparable to, a bank deposit; or
(b) there is no or little risk of the investor losing his principal or not achieving the stated or targeted rate of returns.

By stating first of all that the product IS a savings account, the investor immediately loses guard on point (b) by implictly implying that there is no risk to his principal which most likely is not the case, especially in the event of premature withdrawal, and dependent on market conditions.


I don't know if the gentleman eventually bought the "account" or got his "free gadget" from the lady, but I sincerely hope that the lady did eventually explain the features of what ever plan she was trying to sell and highlight the fact that it is NOT A SAVINGS ACCOUNT!

Incidents like these make me wonder if I'm making the right choice staying on in this industry.