The Financial Advisers Act is Singapore’s licensing statute for anyone who advises the public on life insurance, investment products or other specified financial products, and it applies whether the advice is given by an individual representative or a corporate entity. This FAQ explains, chapter by chapter, what it requires and who is caught.
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 actually does
The Financial Advisers Act 2001 (the “FAA”) licenses and regulates persons who carry on a “financial advisory service” in Singapore, a defined term covering advising on investment products, arranging life policies, and marketing collective investment schemes, among other activities set out in the Act’s Second Schedule. It is administered by the Monetary Authority of Singapore and sits alongside, and in places overlaps with, the Securities and Futures Act, which licenses dealing in and advising on capital markets products more broadly.
Directors and company secretaries typically meet the FAA when setting up an independent financial advisory firm, when a related corporate structure (such as a single family office) needs to confirm it is not inadvertently carrying on a licensable financial advisory service, or when MAS correspondence references a specific FAA section.
Structurally, the Act is organised into financial advisers and representatives (Part 2), conduct of business including life insurance and specified products (Part 3), accounts and audit (Part 4), and a set of investigation, enforcement and miscellaneous provisions in the later parts. Most of the questions directors actually ask sit in Part 2, which covers the licensing threshold itself and the registration of representatives, which is why this FAQ concentrates there.
It is also worth being clear about what the FAA does not cover. Dealing in and advising on capital markets products more broadly is licensed under the Securities and Futures Act 2001, and the two regimes overlap for some product categories (certain investment-linked products, for instance) without being interchangeable. Banking and insurance licensing sit under their own separate statutes entirely.
Who these FAA chapter explainers are for
This guide is written for directors, compliance officers and company secretaries of Singapore entities that provide, or are considering providing, financial advisory services, and for family office structures assessing whether their activities fall within or outside the FAA licensing perimeter. For the authoritative, current statutory text, always go to Singapore Statutes Online rather than relying solely on a summary.
It is equally useful for a small independent advisory practice weighing up whether to apply for a full licence or rely on an exemption, and for the board of an existing licence holder that wants a refresher on where the licensing perimeter actually sits, rather than relying on institutional memory of advice given when the firm was first set up, which may no longer reflect the current statutory wording.
Eligibility and requirements: the licensing threshold
The core obligation is in Part 2 of the Act. Under section 6, a person must not act as a financial adviser in Singapore in respect of any financial advisory service unless that person is authorised by a financial adviser’s licence or is an exempt financial adviser under section 20. A person is treated as acting as a financial adviser in Singapore if their activity is intended, or likely, to induce the public in Singapore to use their financial advisory service, regardless of where the activity is physically carried out.
Separately, section 18 prohibits holding out as a financial adviser unless the person is licensed, exempt, or specified in the First Schedule. This is a distinct offence from acting without a licence under section 6: a person can fall foul of section 18 simply by describing themselves as a financial adviser without being entitled to.
The licence itself is granted subject to minimum financial requirements and, in most cases, a professional indemnity insurance policy under section 9; failing to maintain either can put the licence itself at risk, quite apart from any separate offence under sections 6 or 18. MAS also assesses the fitness and propriety of the applicant’s directors, chief executive officer and representatives as part of the licensing decision under section 8, so a licence application is as much about the people involved as about the corporate entity’s paperwork.
Cost and timeline: the numbers that matter
- Acting as a financial adviser without a licence or exemption: a fine not exceeding S$75,000, or imprisonment not exceeding 3 years, or both, and a further fine not exceeding S$7,500 for every day the offence continues after conviction (section 6(4)).
- Holding out as a financial adviser without entitlement to do so: the same penalty scale, a fine not exceeding S$75,000, or imprisonment not exceeding 3 years, or both, with the same daily continuing-offence fine of up to S$7,500 (section 18(2)).
- Exempt financial advisers and certain representatives must pay annual fees under section 21, distinct from the licence fees payable by fully licensed financial advisers under section 11.
- Grounds on which MAS may refuse a licence application span fitness and propriety, financial standing, educational qualifications and past conduct of the applicant, its officers and its substantial shareholders (section 8), so cost planning for a new application should budget for this diligence stage, not only the application fee itself.
None of these figures caps the practical commercial risk. Beyond the statutory fines, MAS can vary, suspend or revoke a licence under section 15, and a firm found in serious breach faces reputational and business continuity consequences well beyond the headline penalty.
These figures are current as at 13 September 2026. Confirm the in-force figure against sso.agc.gov.sg before quoting it, since FAA penalty and fee provisions are periodically revised.
How FAA licensing and compliance works, step by step
- Determine whether your activity is a “financial advisory service”. Check the definition and the Second Schedule categories against what your business actually does.
- Check for an exemption. Confirm whether section 20 (exempt financial advisers, such as certain banks and insurers) or another MAS class exemption applies before assuming a full licence is needed.
- Apply for a financial adviser’s licence if required. This covers minimum financial requirements, professional indemnity insurance under section 9, and fitness and propriety of directors and representatives.
- Register representatives. Individuals must be appointed or provisional representatives under Part 2 Division 2 before giving advice on the licence holder’s behalf.
- Disclose product information and observe conduct rules. Part 3 requires disclosure to clients, restricts misleading statements, and governs how client money and property are handled.
- Keep accounts and undergo audit. Part 4 imposes bookkeeping and audit obligations on licensed financial advisers, separate from their general corporate filing obligations under the Companies Act 1967.
- Review the exemption position periodically. A change in client base, product mix, or corporate structure can shift whether an exemption relied on previously still applies; this is worth revisiting at least annually rather than only when MAS raises a query.
Throughout this cycle, the entity’s general corporate obligations under the Companies Act 1967 continue to run on their own separate timetable. An FAA licence application or renewal does not pause or extend the annual return deadline, and MAS licensing status is not, by itself, evidence of good standing for ACRA purposes; the two regulators assess different things and file with different timelines.
Common mistakes and gotchas
- Assuming that because a family office only advises related parties, no financial advisory licence or exemption analysis is needed; the position depends on the specific structure and must be checked, not assumed.
- Conflating FAA exemptions with SFA exemptions; a structure that is properly exempt under one Act is not automatically exempt under the other.
- Describing a role internally or externally as “financial adviser” without checking section 18, which penalises the holding-out itself, separately from acting without a licence.
- Treating the 15 June 2026 notification-based regime for single family office licensing exemptions as an update to the old S$10 million assets-under-management ramp-up structure, when it in fact replaced that earlier framework; using superseded terms in client material is a common and avoidable error.
- Overlooking the professional indemnity insurance requirement in section 9 when budgeting for a new licence application.
- Quoting a section number from an older internal memo without checking whether it has since been amended or renumbered; both the FAA and its subsidiary regulations are updated periodically.
For the current single family office exemption regime specifically, see our sister site’s explainer on MAS’s new class exemption for single family offices: the 15 June 2026 notification regime, which is the current framework and supersedes the earlier 2023 version.
How the FAA interacts with related regimes
Few licensed financial advisory businesses deal with the FAA in isolation. Where a firm also deals in or advises on capital markets products, such as unit trusts structured as collective investment schemes, it may separately need a capital markets services licence, or an applicable exemption, under the Securities and Futures Act 2001. A single family office assessing its own licensing position needs to consider both the FAA and the SFA, since either statute, or both, could in principle apply depending on the precise services it provides and to whom. Corporate secretarial obligations under the Companies Act 1967, including the appointment of a company secretary and the annual return deadline, apply to a licensed financial adviser in exactly the same way as to any other Singapore company; FAA licensing does not substitute for, or extend, any Companies Act deadline.
FAQs
What does the Financial Advisers Act actually regulate?
It regulates who may carry on a financial advisory service in Singapore, meaning advice on investment products, arranging of life policies and related activities, and it licenses both the corporate entity and its individual representatives.
What is the penalty for acting as a financial adviser without a licence?
A fine not exceeding S$75,000, imprisonment not exceeding 3 years, or both, under section 6(4), plus a further fine of up to S$7,500 for each day the offence continues after conviction.
Is holding out as a financial adviser a separate offence from acting without a licence?
Yes. Section 18 penalises holding out as a financial adviser without entitlement to do so, independently of section 6, which penalises actually carrying on the activity without a licence or exemption.
Does a single family office automatically need an FAA licence?
Not automatically; it depends on whether the office’s activities fall within the definition of a financial advisory service and whether an exemption, such as the current single family office class exemption regime, applies. This must be assessed on the specific facts.
What happens if the licence holder fails to maintain its financial requirements or PI insurance?
Under section 9, this is a specific ground on which MAS can act against the licence, separate from the general licensing offences in sections 6 and 18, and can ultimately put the licence’s continuation at risk if not remedied.
Where can I check the current text of the FAA?
The authoritative, up-to-date version is on Singapore Statutes Online, and MAS’s own guidance at mas.gov.sg should be checked alongside it.
Can the same business need both an FAA licence and an SFA licence?
Yes, in some cases. A firm that both advises on life policies and specified investment products, and deals in or advises on capital markets products more broadly, may need to hold, or be exempt from, licensing under both the Financial Advisers Act and the Securities and Futures Act, depending on the precise activities carried on.
Related guides
For a detailed walkthrough of FA and FA representative licensing specifically, see our companion article on MAS financial adviser (FA) and FA rep licensing: frequently asked questions. If your compliance question touches a work pass issue rather than a licensing structure, our associated employment agency has a guide on S Pass quota breach remediation steps. For company-level filing obligations that sit alongside FAA licensing, see acra.gov.sg.
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.