5 Things Singapore Should Do to Improve Our Financial Wellbeing
It’s National Day and as our country celebrates its 59th year of independence, I have a wish list for our country to better the financial wellbeing of those of us who call this island city home.
Ban Commissions For Insurance and Investments
Commissions are a simple concept – you sell a product, you get a commission. This incentivises the person to sell more, and it’s a working formula for many products, be it shoes, vacuum cleaners or credit cards. If someone does a great job in promoting a certain item to you, he/she should be compensated for closing that sale.
However, when it comes to financial products like insurance and investments, particularly those that are going to have a lasting impact to our financial health years or even decades after it’s been bought, are commissions really the remuneration model we want for our “financial advisers”?
Singaporeans are underinsured and not adequately prepared for retirement, and the continual pervasion of commissions as the main form of remuneration in the so-called “financial advisory” industry has not only failed to improve such problems, but in my opinion has exacerbated these issues. People are paying expensive premiums for policies that provide poor coverage, and savings and investment products are laden with fees and commissions that take away too much from their retirement nest eggs.
When you pay commissions, you naturally get salespeople. While there is nothing wrong with the sales profession, good financial wellbeing requires a holistic approach that often does not involve a product transaction. It’s time to ban or at least drastically reduce the amount of commissions financial products are able to give so that we have a chance to reform the financial advisory industry and improve outcomes for Singaporeans.
Ban Predatory Advertising For Financial Products
While banning commissions is a seismic shift, a small baby step regulators can do is to outlaw the practice of giving “bonus units” that come with multiple strings attached and lock-in periods. Now, I’m not referring to free shares and cash that many trading apps offer to attract users. Those come with relatively short holding periods, and after satisfying the conditions you can indeed walk away with the gifts without being tied down to the product.
Instead, I am referring to products that advertise bonus units to attract customers only to lock them into lengthy commitment periods or suffer financial losses if they terminate the product prematurely. The biggest culprit of this are investment-linked policies (ILPs) which I feel have become too predatory with their marketing, and this problem is compounded by the commission-based remuneration model of the financial advisory industry.
Unlike many products, financial products are often complex with terms and conditions that are too onerous for laypeople to understand. There should therefore be stronger regulations against this kind of marketing that can induce people into making poor financial decisions.
Increase Public Awareness and Education Efforts
Just like how we have run commercials on things like antibiotics, it’s also time we step up increasing public awareness on better ways to handle things like insurance, investments, and financial planning.
For a start, we can start educating people on the merits of something like term coverage. It’s not just my opinion – in 2010, then Senior Minister Goh Chok Tong addressed an insurance company and its agents, encouraging them to place more emphasis on pure protection plans like term policies:
The insurance industry should not always push for a Whole Life Plan as it may result in under insurance. It needs to place more emphasis on a pure protection plan like a simple Term Assurance which is a more cost-effective way of addressing the protection needs of Singaporeans.
Public service announcements and financial literacy campaigns should be in place to educate people on good financial planning practices. Information like how to pick insurance policies, plan for one’s retirement, selecting investment tools to use etc. should be widely and repeatedly broadcast. If our country can’t (or won’t) ban financial commissions, the least we could do is to arm people with better financial knowledge.
Improve Access to Financial Planning
On top of public education programmes, financial planning as a service itself should be made more accessible. This is especially so for lower to middle income families who can benefit greatly from proper allocation of their limited resources.
Just like how we have subsidised healthcare, the government can consider offering subsidised financial planning. This can be achieved by expanding the service offerings of government entities like moneysense to include basic financial planning and advice. Alternatively, private sector professionals can also be roped in to provide such services.
It is my hope that MoneyOwl can indeed fill in such a role. After being deemed not commercially viable and later being acquired by Temasek Trust, a relaunched MoneyOwl seems like it would be in a good position to deliver financial planning to segments of Singaporeans.
Open Up the Distribution of Financial Products
Singapore should also move to improve access to financial products, particularly in the insurance industry. Currently, it is up to individual insurers whether to make their product available for purchase online, through independent financial advisers, or via their tied salesforces.
It’s been more than 2 decades since the Financial Advisers Act was passed in 2001, allowing for financial advisers independent of insurance companies. This allows for more objective advice, but insurers have the ability to choose whether or not to make their products accessible. This gives insurers too much power over
Insurance companies should not have such discretion, and need to be made to open up their products for transaction online and through licensed and regulated advisers. This allows for ethical and well meaning advisers to provide advice on the entirety of the insurance market. DIY individuals will also be able to obtain coverage without going through a financial adviser.
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I’m realistic and recognise that some of the items on this list may never happen in my lifetime, so the best thing to do – as always – is to stay on top of our own financial matters. Regardless of the way things are in our country, no one would care more about your own finances than yourself.
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Seth Wee was a licensed financial adviser representative from 2009 to 2025, with over 16 years of experience in Singapore’s financial advisory industry.
He started Sethisfy.com in 2019 to share practical insights on credit cards, banking products, and miles strategies, helping readers identify financial products that deliver the best value. Seth has been featured in CNA, Channel 8, Today, and a host of other publications. In 2025, he was also part of a panel at CPF’s Ready For Life festival.
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