BACKGROUND

The Monetary Authority of Singapore (MAS) has updated its FAQs on Financial Advisers Act, Financial Advisers Regulations, Notices and Guidelines, providing critical insights on financial advisory services delivered via the internet and the regulatory status of financial influencers, or “finfluencers.” These updates reflect MAS’ efforts to adapt regulatory frameworks to the evolving digital landscape while safeguarding public interests.

The FAA governs financial advisory activities in Singapore to ensure the professionalism and accountability of those providing such services. The recent updates address the growing prevalence of cross-border internet-based advisory services and the increasing role of social media in financial education.

KEY CLARIFICATIONS

1. Overseas Financial Advisory Services via the Internet

MAS has clarified that a person outside Singapore who engages in activities through online platforms intended to or likely to induce the public (or any section of the public) in Singapore to use their financial advisory services will be considered to be acting as a financial adviser in Singapore. Such activities fall under the purview of the FAA, and individuals or entities conducting them must hold a financial adviser’s licence to avoid contravening Section 6(1) of the FAA.

This provision ensures that cross-border financial advisory activities targeting Singapore residents are subject to the same regulatory scrutiny as local advisers, thereby protecting consumers from potential risks posed by unlicensed operators.

2. Regulation of Financial Influencers (Finfluencers)

MAS has addressed whether finfluencers, who use social media to share financial tips and insights, are required to be licensed under the FAA. The key takeaway is that not all finfluencer activities fall under the FAA. The regulatory framework applies only when a finfluencer provides financial advisory services as defined under the FAA.

MAS highlighted that:

• Non-Advisory Activities: General financial education, such as explaining financial terminology, outlining features of financial products, and offering broad financial planning tips, does not constitute financial advice.
• Advisory Activities: When finfluencers provide tailored, specific advice on financial products to individuals, they must comply with the FAA, including being appointed as representatives of licensed financial advisory firms.

MAS’ Guidelines on Provision of Financial Advisory Services provide a two-stage test for finfluencers to determine whether their activities qualify as financial advice:

1. Whether the activity constitutes financial advice under the FAA.
2. Whether the person is conducting a business in such activity.

 

WHAT’S NEXT?

These clarifications serve as a guide for various stakeholders:

• Overseas Financial Advisers: Those targeting Singapore residents via the internet must ensure they are properly licensed under the FAA.
• Finfluencers: Individuals should use the two-stage test to assess their activities  are licensable and to avoid serious regulatory breaches.
• Consumers: The public should be vigilant when engaging with online financial advisory services, confirming that providers are licensed and legitimate.

HOW WE CAN HELP

We have extensive experience in advising Licensed and Exempt Financial Advisers under the FAA. Whether you are a financial adviser, a finfluencer, or a business exploring cross-border opportunities, our expertise can help you navigate MAS regulations effectively.

Contact Us to discuss how we can support you in aligning your activities with regulatory requirements.