Financial Advisers Act (FAA) chapter explainers — Step-by-step walkthrough
Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.
The Financial Advisers Act is the statute that governs who may provide financial advisory services in Singapore and how they must conduct themselves. This chapter explainer sets out the licensing regime, the conduct and disclosure duties, and the practical steps to authorisation, so advisory firms and their representatives can apply the Act with confidence in 2026.
What the Financial Advisers Act covers
The Financial Advisers Act 2001 (FAA), administered by the Monetary Authority of Singapore, regulates the provision of financial advisory services – advising on investment products, issuing analyses or reports, and arranging life policies. It sits alongside the Securities and Futures Act, which covers dealing and fund management.
Section 6 of the Financial Advisers Act 2001 requires a person to hold a financial adviser's licence to carry on a business of providing any financial advisory service, unless that person is an exempt financial adviser such as a bank or insurer operating under its own regulatory regime.
For corporate-secretarial and related context, see Singapore Budget 2026: Tax Rebates and Business Support for SMEs. Our companion article MAS Financial Adviser (FA) and FA Rep licensing — Step-by-step walkthrough covers a related angle.
Who the Act applies to
Licensed financial advisers, their appointed and provisional representatives, insurance intermediaries and the compliance teams supporting them are the core audience. Firms restructuring from a tied-agency model to independent advice also need the Act's transition rules.
On the immigration and employment side, see What Happens to Your Singapore Employment Pass When You Change Jobs.
The licensing and representative regime
A firm seeking to provide advice applies to MAS for a financial adviser's licence covering specified financial advisory services. Individuals who provide the advice must be appointed representatives, satisfy the Minimum Entry and Examination Requirements, and be assessed as fit and proper.
Base capital and professional indemnity insurance requirements apply. A licensed financial adviser is generally required to maintain professional indemnity insurance cover and meet the financial-resources rules set out in MAS notices and regulations made under the Act.
Conduct, disclosure and the duty to clients
Section 25 of the Financial Advisers Act 2001 requires a financial adviser to disclose all material information relating to a designated investment product it recommends, and Section 27 addresses the obligation to have a reasonable basis for any recommendation made to a client. These conduct duties are the heart of consumer protection under the Act.
Section 23 of the Financial Advisers Act 2001 addresses the disclosure of certain interests when making recommendations, guarding against undisclosed conflicts. Breaches of conduct duties are a frequent subject of MAS enforcement and civil claims.
Cost, timeline and ongoing compliance
A financial adviser's licence application commonly takes four to six months once the submission is complete. Beyond the application fee, firms should budget for compliance staffing, professional indemnity cover, and continuing professional development for representatives, which for a small advisory firm often totals S$25,000 to S$60,000 a year.
Ongoing duties include accurate record-keeping of advice given, fair-dealing controls, periodic returns to MAS, and prompt notification of changes to key appointments or business model.
Common mistakes and gotchas
Firms often blur the line between giving 'information' and giving 'advice', let representatives operate before appointment is confirmed, or under-document the reasonable basis for a recommendation. Each maps to a specific FAA conduct obligation.
Step-by-step: from application to authorised adviser
First, define the advisory services and the products in scope, because the Financial Advisers Act regulates advice on designated investment products and the arranging of life policies, and the licence is granted for specified services. A clear scope drives the rest of the application.
Second, line up the people. Each individual who will advise must satisfy the Minimum Entry and Examination Requirements and be assessed as fit and proper before they are appointed as representatives on the public register. Appointing or allowing a representative to act before approval is a frequent and avoidable breach.
Third, build the compliance spine: a fair-dealing framework, a process to evidence the reasonable basis for each recommendation, disclosure templates for material product information and conflicts, and record-keeping that survives a MAS inspection. These are not optional extras; they are the conduct duties the Act enforces.
Numbers that matter: cost, cover and timeline
Plan for a four-to-six-month authorisation timeline once the submission is complete, professional indemnity insurance cover sized to the business, and an annual compliance budget that for a small advisory firm commonly falls between S$25,000 and S$60,000. The single largest variable is headcount in compliance and the number of representatives requiring continuing professional development.
These costs are recurring, not one-off. Treating authorisation as a project that ends at licensing, rather than an ongoing obligation, is what leads to lapses in representative appointments and disclosure controls.
Related guides and where to go next
Advisory firms often sit alongside capital markets services licensees and use corporate structures that touch the wider group's expertise, and the cross-references here point to those resources. Reading the Financial Advisers Act together with the Securities and Futures Act gives the full regulatory picture for an investment-services business.
Where the business model sits close to the boundary between information and advice, an early regulatory review avoids an expensive misstep, and Raffles Corporate Services can introduce a suitable firm from its panel.
Official sources and further reading
Always verify the current position against the primary sources: sso.agc.gov.sg, www.mas.gov.sg, www.acra.gov.sg.
FAQs
Is giving general market commentary regulated advice?
Factual information that does not amount to a recommendation on a specific product is generally outside the Act, but the line is fact-sensitive and firms should document where it sits.
Do banks need a financial adviser's licence?
Banks and certain other institutions are exempt financial advisers and operate under their own regulatory regimes, though their representatives still meet conduct requirements.
How long does authorisation take?
Plan for four to six months from a complete application, longer if MAS raises queries on the business model or key personnel.
Need help with this? Call, SMS or WhatsApp +65 8501 7133, or email [email protected]. Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.