By JAMIE LEE

Three insurance brokers - Acclaim Insurance Brokers, Leadenhall Insurance Brokers and Magnetron Insurance & Financial Services - have been told by the central bank to stop offering advisory services by today.

And come Jan 22 next year, they will also lose their exemption from a financial adviser's licence requirement.

'This means that they will no longer be permitted to provide financial advisory services in Singapore,' said the Monetary Authority of Singapore (MAS) yesterday.

Following an inspection of how the three firms provided financial advisory services, the central bank found contraventions of the Financial Advisers Act.

'Further, MAS found that they did not have adequate management oversight or control policies and procedures for their financial advisory operations.'

This included the monitoring of the conduct of their representatives or introducers, as well as complaint investigation and resolution process.

As the three firms are registered insurance brokers under the Insurance Act, they were exempted from the requirement to hold a financial adviser's license.

MAS said that it was 'withdrawing (their) exempt status . . . on the grounds of their contraventions of the FAA and in the public interest'.

It has instructed the three firms to ensure that all outstanding orders from clients and their monies are forwarded to relevant parties. It added that the firms must inform their customers that they are no longer allowed to provide such services; explain any effect on their investments or insurance policies; as well as provide contact persons to handle queries relating to their loss of exemption.

But the status of life insurance policies of clients under these firms and premiums paid under such policies will not be affected, said MAS.

Acclaim had faced police investigations a year ago over claims that clients' funds were channelled to Leadenhall without their permission. Some $57 million from 2,000 clients was allegedly transferred.

This article was first published in The Business Times on December 23, 2008.