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The Monetary Authority of Singapore (MAS) periodically updates the Notices issued under the Financial Advisers Act 2001 (FAA) governing financial advisory and insurance distribution conduct. The FAA regulates advice on investment products, which include life policies but not general insurance such as fire, liability or work injury cover. Two notices cover advice on a life policy or another investment product: FAA-N16 on recommendations on investment products (the obligations on licensed FAs to conduct fact-find and ensure recommendations are suitable for client circumstances) and FAA-N20 on the Balanced Scorecard remuneration framework for FA representatives and the Independent Sales Audit Unit. The latest amendments to both notices took effect on 29 December 2025. Among them, FAA-N16 now requires an adviser, with narrow exceptions, to review the advice documents before a recommended transaction takes effect, and for some clients to make a call-back as well. Commission disclosure is not in either notice: it sits in FAA-N03, last amended in 2018. For Singapore SMEs evaluating insurance procurement: understanding the framework explains the depth of fact-find expected, the documentation obligations imposed on advisers, and the regulatory protections that apply to SME consumers.

The Sourced Detail

The MAS Notices framework under the FAA defines operational and conduct standards for financial advisers and insurance distributors. Understanding the framework helps SMEs understand both the service quality expectations and the regulatory protections that apply.

The MAS Notices framework

MAS issues these Notices under the Financial Advisers Act 2001 and publishes them on its website.

Specific MAS Notices issued under FAA:

  • FAA-N02: Introducer arrangements (see what MAS Notice FAA-N02 requires of introducers)
  • FAA-N03: Information to clients and product information disclosure, including the commission an adviser receives
  • FAA-N26: Competency requirements for representatives of financial advisers, in force from 1 April 2024
  • Specific other notices per FAA framework
  • FAA-N16: Recommendations on investment products
  • FAA-N20: Balanced Scorecard remuneration framework and Independent Sales Audit Unit

MAS Notice authority:

  • Specific binding regulatory effect
  • Licensed entity compliance
  • Operational operational standards

FAA-N16 - Recommendations on investment products

What the notice requires of an adviser, and how a breach is proved, is explained in full in the FAA-N16 reasonable basis duty.

Foundation framework:

Per MAS Notice FAA-N16:

Specific obligations on licensed FAs:

1. Fact-find:

  • Specific fact-find of client circumstances
  • Operational commercial needs assessment
  • Operational specific risk profile assessment
  • Operational operational scope

2. Suitability assessment:

  • Specific suitability of recommendations to fact-find
  • Operational operational scope
  • Operational operational standards

3. Specific documentation:

  • Specific fact-find documentation
  • Operational specific recommendation rationale

4. Operational scope:

  • Specific recommendation alignment with circumstances
  • Operational operational scope
  • Operational operational sophistication

FAA-N20 - Balanced Scorecard remuneration framework

Foundation framework:

Per MAS Notice FAA-N20:

Specific remuneration and audit provisions:

  • Balanced Scorecard framework: representatives' remuneration tied to non-sales quality indicators, not sales volume alone

  • Independent Sales Audit Unit: post-transaction checks on sampled transactions, independent of the sales function

  • Operational operational considerations

Specific implications for advisory relationships:

  • FAA-N20 does not apply to every client. Under regulation 34A of the Financial Advisers Regulations, it does not apply to advice given to a client that is not an individual, such as a company, or to recommendations on group life policies
  • Operational operational scope

The latest update: 29 December 2025

Amendments to both notices took effect on 29 December 2025. Changes for a client under FAA-N16 include:

  • Before a recommended transaction takes effect, the adviser must, with narrow exceptions, review the advice documents to check that the non-sales standards were met.
  • For a selected client, or a client of a selected representative, the adviser must also make a call-back, unless a supervisor was present for the whole sales and advisory process.
  • A client is a selected client when at least two of these apply: aged 62 or over, not proficient in the language the sales process is run in, and without at least GCE 'O' or 'N' Level or equivalent qualifications. The adviser may treat the client otherwise only if it has reason to conclude the client has adequate knowledge and experience in the products recommended.
  • A selected representative is one graded B or worse under the balanced scorecard for the two quarters before.
  • Commission disclosure did not change. It sits in FAA-N03, last amended in 2018.

Specific SME implications

For Singapore SMEs procuring insurance:

Foundation expectations:

When an SME takes advice on a life policy or another investment product from a licensed or exempt financial adviser, it should expect the following. None of it is required by FAA-N16 of a broker placing general insurance such as fire, liability or work injury cover:

1. Comprehensive fact-find:

  • Specific commercial profile assessment
  • Operational operational profile assessment
  • Operational risk profile assessment

2. Specific suitability assessment:

  • Specific recommendation alignment with profile
  • Operational operational scope
  • Operational operational standards

3. Specific documentation:

  • Specific fact-find documentation
  • Operational specific recommendation rationale documentation
  • Operational operational scope

4. Specific commission disclosure:

  • Specific commission and fee disclosure
  • Operational operational scope
  • Operational specific transparency

Specific dispute resolution implications

For SMEs with adviser disputes:

Specific complaint frameworks:

  • Operational specific licensed entity complaint procedures
  • Operational specific FIDReC where applicable
  • Operational specific MAS engagement
  • Operational operational scope

Operational scope:

  • Commercial dispute resolution
  • Operational operational scope
  • Operational operational considerations

Operational considerations considerations

For SMEs evaluating advisory relationships:

Specific quality indicators:

  • Specific fact-find depth and quality
  • Operational specific recommendation rationale

Specific transparency indicators:

  • Specific commission and fee disclosure
  • Operational operational scope
  • Operational operational standards

Specific service indicators:

  • Specific advisory continuity

Specific industry-specific considerations

For specific industries:

  • Specific industry-specific fact-find expectations

Specific high-complexity scopes:

  • Specific specialised industries warrant specialised advisory

Specific introducer relationship implications

For SMEs introduced via FAA-N02 introducers:

Specific transition framework:

  • Introducer provides factual information and gateway
  • The licensed or exempt financial adviser gives any advice, and FAA-N16 governs its recommendation on an investment product. FAA-N20's balanced scorecard does not apply where the client is not an individual, such as a company
  • Specific commercial transparency
  • Operational operational scope

Specific protections:

  • Full FAA framework protections at advisory stage
  • Operational operational scope
  • Operational operational standards

Operational considerations for SME procurement

For SMEs evaluating insurance procurement options:

Foundation considerations:

  • Specific FA / broker licensing verification
  • Operational specific industry experience
  • Operational operational scope
  • Operational operational sophistication

Commercial relationships:

  • Specific commercial transparency
  • Operational operational scope
  • Operational operational sophistication

Specific service expectations:

  • Specific fact-find quality
  • Operational specific recommendation rationale

What's likely in coming years

Continued framework refinement:

MAS continues to refine the framework. Operational scope.

Specific industry-specific guidance:

Specific industry-specific guidance expected. Operational scope.

Specific market evolution:

Advisory industry continues evolution. Operational considerations.

Common Mistakes / What Goes Wrong

  1. No fact-find verification. Specific compliance and quality risk.
  2. Specific recommendation without documented rationale. Specific dispute resolution risk.
  3. No commission disclosure. Specific commercial transparency gap.
  4. Inadequate suitability assessment for SME profile.
  5. No industry-experienced adviser engagement. Operational sophistication gap.
  6. Commercial complexity without specialised advisory.
  7. No dispute resolution framework awareness. Specific consumer protection gap.
  8. Commercial relationships without specific transparency. Operational scope gaps.
  9. No annual review. Specific evolving regulatory framework.
  10. No introducer / FA framework awareness. Operational scope misalignment.

What This Means for Your Business

For Singapore SMEs evaluating insurance advisory:

  1. For a life policy or another investment product, expect a fact-find. FAA-N16 requires the adviser to take reasonable steps to collect and document the client's financial objectives, risk tolerance and financial situation before recommending. It does not apply to general insurance.

  2. Specific suitability assessment matters. Recommendation rationale documented.

  3. Specific commission and fee disclosure. Commercial transparency.

  4. For specific industries / commercial complexity, specialist advisory.

  5. For dispute resolution, FIDReC and other frameworks.

  6. Annual advisory review.

  7. Commercial relationship transparency. Commission, fees, advisory continuity.

  8. For introducer / FA frameworks, understand specific scope. operational alignment.

The MAS Notice framework establishes specific advisory conduct standards. SMEs that engage with licensed advisers benefit from foundation regulatory protections; understanding the framework explains both expectations and protections.

Questions to Ask Your Adviser

  1. For my SME profile, what fact-find depth applies?
  2. How does my recommendation rationale address my specific commercial profile?
  3. What specific commission and fee disclosure applies?
  4. For my industry, what specific industry-experienced advisory applies?
  5. As regulatory framework evolves, what advisory evolution should I plan for?

Related Information

Published 5 May 2026. Source verified 5 May 2026.