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Financial Adviser License in Singapore

A company must hold a financial adviser (FA)'s License to conduct financial advisory services regulated under the Financial Advisers Act, unless otherwise exempted. Individuals representing licensed FAs or exempt FAs need to be appointed as representatives.

Timeframe 6 Months
Capital US$ 188,000
Accounting Required Accounting Required
Nominee Required Nominee Required

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Financial Adviser License Cost

From

US$ 21,000 Service Fees
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The benefit of having Financial Adviser’s License in Singapore

  • Growing economy

Singapore is already one of the world’s top financial hubs, and it is constantly innovating. The Monetary Authority of Singapore (MAS), the financial and AML regulator, has created a friendly and sustainable environment for financial advisor companies.

  • Procrypto environment

The new flexible regulation for financial service has a favorable license regime with low fees; Singapore is eager to support the development of advisers in finance businesses.

  • Lenient tax system

There are no taxes on the profits generated outside of Singapore. The income from a local activity is subject to a mere 8,5% for the first S$300,000 ($220k) and 17% for anything above.

  • Uncorrupted reputation

Singapore is one of the most respectable financial centers in the world. Its reputation as a stable, technology-oriented jurisdiction makes it an attractive place for business and investment.

Activities of Financial Adviser

Who can Apply

When assessing an application for a Financial Adviser License, MAS takes into account factors such as:

  • Fitness and propriety of the applicant, its shareholders and directors.
  • Track record, management expertise and financial soundness of the applicant and its parent company or major shareholders.
  • Ability to meet the minimum financial requirements and professional indemnity insurance requirements prescribed under the FAA.
  • Strength of internal compliance systems.
  • Business plans and projections.

Your company will also need to appoint the following individuals:

  • Minimum of 2 directors, at least one of whom is resident in Singapore.
  • Chief Executive Officer with at least 10 years of relevant experience, of which at least 5 years must have been in a managerial capacity and is resident in Singapore.
  • Minimum of 3 full-time Singapore-based individuals with at least 5 years of relevant working experience.

You can refer to the Guidelines on Criteria for the Grant of a Financial Adviser’s License for more information.

Who can Apply

Financial requirements in Singapore

MAS conducted a Financial Advisory Industry Review (FAIR) in 2012. One of the objectives of FAIR was to enhance the admission criteria and ongoing requirements for FA applicants and licensees. To ensure a smooth transition for new entrants when the enhanced requirements come into effect, MAS expects all FA License applicants to meet the enhanced requirements (listed below).

  • (i) Base capital requirement

    If your company only advises others by issuing or promulgating research analyses or research reports concerning investment products, you are required to maintain a minimum base capital of SGD 250,000. For all other types of financial advisory activities, you are required to maintain a minimum base capital of SGD 500,000, or a lower base capital of SGD 300,000 plus additional professional indemnity insurance of SGD 500,000.

  • (ii) Financial resources requirement

    You are required to maintain financial resources that are the higher of:

    • a) ¼ of your relevant annual expenditure of the preceding financial year; or
    • b) 150,000 SGD.
  • (iii) Professional indemnity insurance (PII)
    • a) For those advising others by issuing or promulgating research analyses or research reports concerning any investment product only, a PII limit of SGD 500,000 applies;
    • b) For all others:

      You are required to have in force a PII policy with varying limits depending on the type of financial advisory services provided. The breakdown is as follows:

      • i. With revenue not more than SGD 5 million, a PII limit of SGD 1 million applies;
      • ii. With revenue more than SGD 5 million, a PII limit that is the lower of (i) 20% of gross revenue or (ii) SGD 10 million applies.
Admission Criteria in Singapore

Validity in Singapore

The License is valid until:

  • The licensee stops conducting all the regulated activities on the License, and the License is canceled by MAS.
  • The License is revoked by MAS.
  • The License lapses following section 19 of the FAA.

All entities that hold a Financial Adviser License are listed on the Financial Institutions Directory. Correspondingly, all entities that cease to hold a License will be removed from the Financial Institutions Directory.

Validity in Singapore
FAQs

FAQs

1. What are some of the reporting requirements for licensed financial advisers?

Licensed financial advisers are required to prepare and lodge with MAS a true and fair profit and loss account and a balance sheet made up to the last day of its financial year in accordance with the provisions of the Companies Act (Cap. 50), where applicable. The above documents are to be lodged together with an auditor‘s report in Form 17. In addition, they are required to submit Forms 14, 15, and 16, where applicable. These documents are to be lodged within 5 months, or within such extension of time as may be permitted by MAS, after the end of the financial adviser‘s financial year

2. Why does MAS regulate certain aspects of financial planning and not the full range of financial planning activities? What is the distinction between a Financial Advisor and a Financial Planner?

The types of services provided by financial planners vary widely. Some planners assess every aspect of their clients' financial profile, including savings, investments, insurance, tax, retirement, and estate planning, and help them develop detailed strategies to meet their financial objectives. Others may call themselves financial planners, but only provide advice on a limited range of products and services.

MAS regulates all financial planning activities related to securities, futures, and insurance. Tax and estate planning activities do not come under our regulatory ambit. Hence, only financial planners who conduct activities regulated under the FAA are required to be licensed as a financial adviser. A financial planner may conduct other activities such as tax planning, but these are not subject to supervision by MAS.

3. Who is exempt from holding a financial adviser's license?

Banks, merchant banks, finance companies, insurance companies, insurance brokers registered under the Insurance Act, holders of a capital markets services license under the Securities and Futures Act (Cap 289). are exempt from holding a financial adviser's license to act as a financial adviser in Singapore in respect of any financial advisory services. Nonetheless, exempt financial advisers and their appointed and provisional representatives are required to comply with the business conduct requirements stipulated in the FAA.

4. Is there a need for a licensed financial adviser to renew its license?

There is no need for a licensed financial adviser to renew its license. The license is valid until – 

  • The licensed financial adviser ceases to act as a financial adviser (pursuant to the Financial Advisers Regulations [―FAR‖], the licensed financial adviser would need to notify MAS within 14 days of its cessation by submitting Form 5); 
  • Its license is revoked by MAS; or 
  • Its license lapses in accordance with section 19 of the FAA.
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