We thank Mr Dylon Poh for his feedback on property agents who provide advice on the use of property to meet clients’ retirement or investment needs (Should real estate agents be regulated under the Financial Advisers Act?, Nov 28). We appreciate the concerns raised. Property purchases are significant financial commitments and consumers should exercise prudence in making such decisions.
Advice on property-related transactions falls outside the scope of the Financial Advisers Act (FAA), which regulates advice on investment products, such as stocks and mutual funds. Comparable jurisdictions such as Australia, Hong Kong and the UK do not require property agents providing property advice to be regulated under their financial advisory regulatory framework.
In Singapore, property agents are prohibited from acting as financial advisory representatives under the FAA. This protects consumers from potential conflicts of interest, such as when an agent might be incentivised to recommend a property purchase yielding higher commissions rather than a financial product that better meets the client’s needs.
Property agents are regulated under the Estate Agents Act (EAA) administered by the Council for Estate Agencies (CEA). Under the EAA, property agencies and agents must act honestly, professionally and in their clients’ best interests. Any opinions provided, including those made about potential yields or price appreciation, must be supported by verifiable facts, such as comparable data of similar properties in the same locality. Property advertisements must also not contain inaccurate, false or misleading claims or information.
CEA will take enforcement action against property agencies and agents who fail to comply with the relevant rules. Depending on the severity of the breach, actions may include issuing letters of warning or censures, imposing financial penalties, or initiating disciplinary proceedings in more egregious cases.
While property is not a financial product under the FAA, financial advisory representatives are required to consider clients’ existing financial commitments when providing advice. There are also other measures to promote prudent borrowing for property purchases, such as the total debt servicing ratio, loan-to-value requirements and CPF withdrawal limits.
Joseph Kiong
Director, Investigations & Inspections
Council for Estate Agencies
Charlene Chew
Head (Corporate Communications)
Monetary Authority of Singapore
