Despite highlighting that the association “wholeheartedly supports” efforts by the Office of the Commissioner for Insurance (OCI) to improve the client experience, chair Kim Smith said advisers had been given an “extremely ambitious and abbreviated time frame”.
She said the IFAA has strong reservations about this forced pace, suggesting it could result in unemployment among its members later this year, therefore creating a “service vacuum”. The secondary implications of this, she said, would be less tax paid in to Hong Kong and fewer people with pensions.
“Many casualties”
“The coming year will see many casualties, and some may have been avoided if better information for owners of small businesses had been available,” said Smith in a report published in February.
In a subsequent statement released last month, she pointed to similar reforms implemented in other countries which she said had been endowed with “greater and broader consultation over less ambitious timeframes”.
At the start of this year, the OCI introduced new legislation which banned product providers from paying indemnity commission to advisers selling Investment Linked Assurance Schemes (ILAS) in Hong Kong.
New legislation also means the underlying investments held within ILAS products now have to be authorised by the Securities and Futures Commission (SFC). This has meant that only professional investors are allowed to invest in open architecture ILAS products.
Poor coordination between the OCI, SFC and other major industry players was said to have damaged Hong Kong’s “reputation for excellence in financial services”, according to Smith.
