3: Tellers won't be able to refer you to wealth managers

By Gabriel Chen

BANK tellers may soon no longer be able to steer customers queueing in bank branches towards representatives flogging investment products.

New rules proposed yesterday will outlaw the practice, which has been a common cause of complaint over the past few years.

The tactic was thrust into the spotlight last year after hundreds of investors lost fortunes when structured products linked to Lehman Brothers went bust.

Many said that they bought these products after bank tellers recommended the products and referred them to relationship managers in the branch.

Some investors said they had gone to the bank just to deposit money or withdraw money from a maturing fixed deposit when they were led into buying these complicated products.

'I estimate about 50 per cent of the High Notes 5 investors were referred by bank tellers,' said Mr Choo TC yesterday.

He was among those who bought DBS High Notes 5, one of several investment products that tanked after the collapse of Lehman. Mr Choo is also a committee member of the High Notes 5 investor group which has pushed for redress and compensation.

The Monetary Authority of Singapore (MAS) said yesterday that walk-in bank customers 'cannot buy investment products from bank tellers as bank tellers are not authorised to sell such products'.

The MAS hopes the proposed rule will help customers better distinguish between the 'deposit-taking function' performed by bank tellers and the sale of investment products by representatives.

Financial advisers welcomed the move but said enforcing it in practice may be difficult.

'I've seen it many times,' said Mr Patrick Lim, associate director of financial advisory firm PromiseLand.

'They conveniently put a brochure next to the teller and the moment you look at it, he will suddenly say, 'Sir, can I refer you to my wealth manager?''

But bankers disagree. They argue that typically tellers get a small referral fee for every successful sale. So as long as this current industry practice is outlawed, the tellers will not have any incentive to do the referral.

'It's quite easy to police actually. Just remove the incentive scheme, and there'll be no more referrals,' a banker said.

This article was first published in The Straits Times.