Financial Advisers Act (FAA) chapter explainers — Eligibility and requirements checklist
The Financial Advisers Act governs who may advise on and arrange investment and insurance products in Singapore, and this chapter explainer sets out the eligibility and requirements checklist for a financial adviser’s licence. It is written for founders, compliance leads and counsel scoping the regime before committing to a build.
Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.
What the Financial Advisers Act covers
The Financial Advisers Act 2001 regulates the carrying on of financial advisory services, which its Second Schedule defines to include advising on investment products, issuing analyses or reports, marketing collective investment schemes, and arranging life-insurance contracts. A person who provides those services as a business must hold a financial adviser’s licence, be an exempt financial adviser, or operate as an appointed or provisional representative of a licensed adviser.
Who this is for
Independent financial advisory firms, wealth managers, insurance intermediaries and platforms distributing investment products are the primary audience. Because the FAA and the licensing of individual advisers interlock, this explainer sits alongside our on-site guide to MAS Financial Adviser and FA Representative licensing, which covers the representative track in detail.
Eligibility and requirements checklist
A financial adviser’s licence applicant must be a company with a permanent Singapore office, a fit-and-proper board and substantial shareholders, and a compliance function sized to the business. The Monetary Authority of Singapore requires a minimum financial-resources position, professional-indemnity insurance appropriate to the scale of advice, and directors and key persons who satisfy the fitness-and-propriety criteria. Representatives must meet minimum-entry and examination requirements and be entered in the public register before they advise a single client.
Conduct obligations sit at the heart of the regime: a licensed adviser owes duties around suitability, disclosure of remuneration and management of conflicts, and must have a reasonable basis for any recommendation. Firms bringing in foreign advisers must synchronise licensing with the work-pass track set out in our secondary guide, the Employment Pass application walkthrough. Where the firm is winding down a legacy vehicle before relaunching, our cross-site guide on striking off and members’ voluntary winding up explains the exit mechanics.
Cost and timeline benchmarks
Expect three to six months from a complete application to approval for a conventional advisory model, longer for novel propositions. First-year set-up and compliance costs commonly run S$40,000 to S$150,000 depending on product scope and headcount, plus professional-indemnity premiums that scale with assets advised. Minimum financial resources for a licensed financial adviser are set by MAS and must be maintained on an ongoing basis, not merely at application.
Step-by-step application flow
Define the exact advisory activities and product set, confirm the financial-resources and professional-indemnity position, appoint fit-and-proper directors and a qualified compliance officer, prepare the business plan and compliance manual, then submit through the MAS portal and respond promptly to queries. Representatives should sit their required examinations early so their register entries are ready when the licence is granted.
Common mistakes and gotchas
The recurring failure is treating suitability as a paperwork exercise rather than a substantive process, which surfaces quickly in a MAS inspection. Firms also under-provision professional-indemnity cover, and some allow representatives to advise before their register entries are live. Finally, remuneration-disclosure obligations are frequently mishandled where the firm earns product commissions.
Suitability as a live process
The heart of the Financial Advisers Act regime is suitability, and MAS treats it as a substantive obligation rather than a form to be signed. A licensed adviser must know the client, understand the product, and have a reasonable basis for recommending one to the other, documenting that reasoning contemporaneously. In an inspection, MAS will sample advice files and test whether the recommendation genuinely fit the client’s circumstances and risk profile, so a firm that treats fact-find and suitability as paperwork will be exposed quickly. Building a disciplined advice process, with proper file notes and a clear audit trail, is therefore a licensing requirement in practice as well as a conduct one.
Remuneration disclosure is the other perennial pressure point. Where an adviser earns commission from product providers, the conflict must be managed and disclosed, and the firm must be able to show that product selection was driven by client interest rather than commission. Professional-indemnity insurance sized to the scale of advice is both a MAS expectation and a practical protection, and it must be maintained on an ongoing basis, not merely purchased at application.
Worked scenario: an independent advisory firm
A new independent financial advisory firm would define its product scope, confirm its financial-resources and professional-indemnity position, appoint fit-and-proper directors and a qualified compliance officer, and ensure its representatives sit their required examinations early so their register entries are live when the licence is granted. Planning on three to six months from a complete application is prudent, and the firm should not advise a single client until the licence is granted and the representatives are registered. Firms retiring a legacy vehicle before relaunch should sequence the wind-down so the two do not overlap in a way that confuses clients or regulators.
Financial Advisers Act (FAA) chapter explainers: key takeaways
The Financial Advisers Act rewards firms that make suitability, disclosure and conflict management real. Maintain financial resources and professional-indemnity cover on an ongoing basis, register representatives before they advise, and document the basis for every recommendation. These are the areas a MAS inspection will test first.
Authoritative sources
The Act is published at Singapore Statutes Online, and licensing guidance and the representative register are maintained by the Monetary Authority of Singapore. Corporate filing obligations for the licensed entity sit with ACRA.
FAQs
Who needs a financial adviser’s licence?
A person carrying on financial advisory services in the FAA’s Second Schedule as a business, unless they are an exempt financial adviser or a representative of a licensed adviser.
Do representatives need to register?
Yes. Representatives must meet minimum-entry and examination requirements and be entered in the MAS public register before advising any client.
How long does FA licensing take?
Generally three to six months from a complete application, longer for novel propositions.
What conduct duties apply?
Suitability, disclosure of remuneration and management of conflicts, with a reasonable basis required for every recommendation.
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.