A business providing financial advice on investment products, insurance, or related matters in Singapore generally needs a financial adviser’s licence under the Financial Advisers Act unless it fits within a specific exemption, and confusing this with a Securities and Futures Act licence is a common and costly mistake. This decision tree sets out the checkpoints.
Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice. It is written for fintech founders, wealth-advisory start-ups and insurance-adjacent platforms assessing whether their planned services fall within the Financial Advisers Act (FAA) regime.
What the FAA actually regulates
The Financial Advisers Act 2001 (FAA) is Singapore’s core statute regulating the provision of financial advisory services, administered by the Monetary Authority of Singapore (MAS). Section 6 sets out the need for a financial adviser’s licence: a person must not carry on business in any type of financial advisory service, or hold himself out as carrying on such a business, unless licensed or exempt. Section 7 governs the application for grant of a licence, and section 8 sets out the grounds on which MAS may refuse to grant one. The types of financial advisory service themselves are set out in the Second Schedule to the FAA, and include advising on investment products, and arranging contracts of insurance, among others. Section 20 separately deals with exempt financial advisers, and section 22 addresses acting as a representative of a licensed or exempt financial adviser.
Decision tree: does your business need an FAA licence
- Advising retail or accredited clients on which investment products (unit trusts, life policies with an investment element, structured products) to buy or sell: this falls within “advising on investment products” under the Second Schedule, and generally requires a financial adviser’s licence unless an exemption applies.
- Arranging contracts of insurance for clients, including life insurance with a savings or investment component: this is a separate type of financial advisory service under the Second Schedule and is commonly encountered by insurtech platforms and wealth-tech apps that bundle insurance with investment advice.
- Only distributing factual product information without providing personal recommendations: execution-only or purely informational services may fall outside the “advice” limb, but the line between factual information and an implicit recommendation is fact-specific and frequently disputed, so platforms relying on this distinction should document their process carefully.
- Operating as a bank, merchant bank, or other entity already regulated under a different MAS regime for the same activity: section 20 exempt financial adviser status may apply, but the exemption is tied to the specific institution type and activity, not a general carve-out for all regulated entities.
- Providing advice as an individual under an existing licensed or exempt financial adviser: section 22 requires acting as a representative rather than holding a separate personal licence, subject to MAS’s representative notification and examination requirements.
Cost and timeline snapshot
Indicative figures based on current market practice for a Singapore financial adviser’s licence application:
- Professional fees for an FAA licence application (legal and compliance advisory): commonly S$15,000 to S$40,000 or more, depending on the number of financial advisory services and complexity of the business model.
- MAS processing time: typically 4 to 9 months from a complete application, varying with the complexity of the proposed services and completeness of the submission.
- Base capital and financial requirements: these differ depending on the type of financial advisory service and are set out in MAS notices rather than the FAA itself, and must be checked against the current notice before budgeting.
- Representative notification: individual representatives acting under a licensed or exempt financial adviser must be notified to MAS and generally pass the relevant industry examinations before starting client-facing work, a process that typically takes a few weeks once the underlying licence is in place.
- Ongoing compliance costs (compliance function, audits, reporting): commonly S$40,000 to S$120,000 or more per year for a small to mid-sized licensed financial adviser, scaling with client numbers and product range.
Who this decision tree is for
This guide is aimed at wealth-advisory and insurtech founders building an advice-led platform, robo-advisers layering investment recommendations onto an execution service, and the CFOs and compliance leads translating a product roadmap into a licensing position before launch. It assumes the reader has already worked through the corporate structuring questions covered in the companion Companies Act 1967 article in this series, and is now assessing which activity-based licence sits on top of that structure. Businesses whose model spans both dealing or fund management activities and advisory activities should also read the companion Securities and Futures Act article, since the two regimes frequently apply together rather than as alternatives.
Exemptions worth checking before assuming you need a full licence
Section 20 of the FAA sets out categories of exempt financial adviser, generally tied to institutions already subject to another form of MAS regulation for the same or a closely related activity, rather than a general small-business carve-out. There is no broad “advising a small number of clients” exemption comparable to some fund-management thresholds under the Securities and Futures Act; the FAA’s exemption framework is narrower and more institution-specific. A start-up should not assume that simply because it serves a small number of clients, or only accredited investors, it automatically falls outside the FAA licensing requirement, and should check the current MAS guidance and, where the position is unclear, take advice before launch.
How the FAA interacts with the Companies Act and the SFA
An FAA licence applicant must already be, or be in the process of becoming, a properly incorporated Singapore entity with a resident director under section 145(1) of the Companies Act 1967, and MAS will scrutinise the shareholding, directors and key management personnel of the applicant as part of the licensing assessment, in the same way it does for a Securities and Futures Act capital markets services licence application. Where a business model spans both advising on investment products and dealing in or managing those same products, both an FAA licence and an SFA CMS licence may be required concurrently, and the two applications, while separate, are usually best planned and budgeted together so that representative notification, base capital and compliance hiring are not duplicated inefficiently across two uncoordinated workstreams.
Insurance-specific considerations
Arranging contracts of insurance sits within the FAA’s Second Schedule alongside advising on investment products, but insurance-linked products bring additional considerations: a life policy with an investment-linked component may trigger both the FAA’s advisory rules and separate insurance regulatory requirements administered by MAS under other legislation, and a platform bundling insurance comparison with personalised recommendations should map each function separately rather than assuming a single licence covers the whole service. Founders building insurtech products should budget time for this cross-regime mapping exercise before finalising their product design, since retrofitting a compliant advice flow after launch is materially more disruptive than designing it in from the outset.
Common mistakes when assessing FAA exposure
The most frequent error is treating advice on investment products and arranging insurance contracts as a single undifferentiated activity, when they are separate types of financial advisory service under the Second Schedule with their own conditions. A second common mistake is assuming an “execution-only” model avoids the FAA entirely, without checking whether the platform’s product recommendations, filters, or default options amount to advice in substance. A third is confusing an FAA licence with a Securities and Futures Act capital markets services licence; a business dealing in or managing capital markets products needs a CMS licence under the SFA, while a business advising on those products needs a financial adviser’s licence under the FAA, and many business models need both. Finally, founders sometimes under-budget for representative notification and examination timelines, which can delay a product launch even after the underlying corporate licence has been granted.
Step-by-step: assessing your position
- Map every service your business intends to provide against the Second Schedule list of types of financial advisory service, one by one.
- For each type identified, check whether a section 20 exempt financial adviser category applies to your specific institution type and activity.
- If no exemption applies, budget for the financial adviser’s licence application under sections 6 to 8, including base capital, professional fees, and the 4 to 9 month indicative processing time.
- Plan representative notification and examination requirements under section 22 for every individual who will give advice to clients, well ahead of the intended launch date.
- Confirm whether the same business model also triggers Securities and Futures Act licensing, since dealing or fund management activities sit alongside, not instead of, FAA-regulated advisory activities.
FAQs
What is a financial adviser’s licence?
It is the licence required under section 6 of the Financial Advisers Act to carry on business in a type of financial advisory service listed in the Second Schedule, such as advising on investment products or arranging contracts of insurance.
Is an FAA licence the same as a CMS licence under the SFA?
No. An FAA licence covers advisory activities, while a CMS licence under the Securities and Futures Act covers dealing and fund management activities; many business models need to consider both.
Does an execution-only platform need an FAA licence?
Not automatically, but the distinction between factual information and an implicit recommendation is fact-specific, and platforms relying on this distinction should document their process carefully.
Who qualifies as an exempt financial adviser under section 20?
Broadly, institutions already subject to another form of MAS regulation for the same or closely related activity; the FAA does not provide a general small-client-base exemption.
How long does an FAA licence application take?
Indicatively 4 to 9 months from a complete submission, with representative notification and examinations adding further weeks before client-facing work can begin.
How Raffles Corporate Services approaches this decision with clients
We typically start an FAA assessment the same way we approach an SFA assessment: listing every service the business intends to offer in plain commercial language before mapping it against the Second Schedule types of financial advisory service. This ordering surfaces overlaps early, for example a wealth-tech app that both recommends unit trusts and arranges the underlying insurance wrapper, which needs its exposure checked under both limbs of the Second Schedule rather than treated as one activity. Once the advisory services are mapped, we check section 20 exempt financial adviser eligibility, flag any concurrent Securities and Futures Act exposure, and only then quote a licensing timeline and cost, so that representative notification, base capital and compliance hiring for both regimes (where both apply) are planned as a single coordinated workstream rather than discovered sequentially.
Related guides
See our companion pieces on the Companies Act 1967 decision tree and the MAS Financial Adviser Representative licensing decision tree. For company secretarial context relevant to any licensed entity, see company secretary statutory duties under the Companies Act, and for how corporate changes cascade into employer filings, see MOM filing requirements following a company name change.
For the primary legislation and regulator guidance, consult Singapore Statutes Online and the Monetary Authority of Singapore, and for corporate filing context, ACRA.
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.