Who counts as a 'representative' under the Financial Advisers Act?

Broadly, an individual who carries out a regulated financial advisory activity (such as advising on or arranging investment products / life policies) for or on behalf of a licensed or exempt financial adviser. Appointed representatives must be fit and proper and are recorded in the MAS Register of Representatives. Confirm the current definition and any thresholds against the FAA and current MAS notices.

What is the difference between a licensed and an exempt financial adviser?

A licensed financial adviser holds a Financial Adviser's Licence from MAS. An exempt financial adviser (for example certain banks, insurers, capital markets services licence holders) is exempt from the licensing requirement but is still subject to the FAA conduct-of-business rules. The precise categories and conditions are set out in the FAA and its regulations.

When is a Customer Knowledge Assessment (CKA) versus a Customer Account Review (CAR) required?

Both come from MAS Notice FAA-N16 and split on listing status: a CKA applies before recommending an unlisted Specified Investment Product (SIP), a CAR before recommending a listed one. A positive CKA is valid for one year, a positive CAR for three. Neither is a suitability check, and a pass does not end the process — the adviser must still offer to provide advice notwithstanding a positive outcome. Excluded Investment Products (EIPs) trigger neither. The exact product classifications sit in the notice's annexes.

What must a representative do when they suspect money laundering?

File a Suspicious Transaction Report (STR) with the Suspicious Transaction Reporting Office (STRO) — not with MAS — as soon as reasonably practicable, as required by section 45 of the CDSA; terrorism-financing suspicions are also reportable under the Terrorism (Suppression of Financing) Act. STRs are filed electronically via the STRO's SONAR platform. Never tip off the customer that a report has been or may be made: that is a separate offence under section 48 of the CDSA. Continue to apply CDD and keep records. See the current MAS AML/CFT notice and the SCI guide for details.

What is the MAS Balanced Scorecard framework?

A remuneration framework designed to align the interests of representatives and their supervisors with fair dealing outcomes, so that pay is not driven by sales volume alone. Non-sales key performance indicators (such as suitability of advice and disclosure quality) affect grading and remuneration. Specific grades, weightings and clawback mechanics are set out in the relevant MAS notice and guidelines.

CMFASPrep · CMFAS RES5 Cheat Sheet 2026cmfasprep.sg

CMFAS RES5 Cheat Sheet (2026) — Rules, Ethics & Skills

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The most exam-relevant CMFAS RES5rules and definitions on one scannable page — FAA scope and who's a representative, licensed vs exempt FA, conduct-of-business duties, needs analysis, EIP/SIP & CKA/CAR, AML/CFT & STR, the MAS Balanced Scorecard, Fair Dealing and key ethics, organised by Part I (Rules & Regulations) and Part II(Ethics & Skills). Specific figures are deliberately hedged — always confirm durations, thresholds and pass marks against the current MAS notice and SCI study guide.

Unofficial revision aid — not endorsed by MAS or SCI and pending practitioner review. Use alongside, not instead of, the official SCI study guide and current MAS notices.

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RES5 at a glance

What RES5 covers

Part	Focus	Questions	Pass mark
Part I	Rules & Regulations (FAA/FAR, conduct, products, AML/CFT)	110	≥75%
Part II	Ethics & Skills (Fair Dealing, Balanced Scorecard, ethics)	40	≥80%

150 MCQs over 3 hours; you must clear both thresholds — there is no combined score, and the smaller part carries the higher bar. Figures per SCI's RES5 exam page; SCI sets them and can change them — check the current SCI guide / MAS notice.

Key acronyms

Term	Means
FAA / FAR	Financial Advisers Act / Regulations
MAS / SCI	Regulator / exam administrator (Singapore College of Insurance)
EIP / SIP	Excluded / Specified Investment Product
CKA / CAR	Customer Knowledge Assessment / Customer Account Review

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Part I · Regulatory framework — who's who

The FAA/FAR skeleton. Know who's regulated, licensed vs exempt, and who a representative is.

The framework

FAA = Financial Advisers Act · FAR = Financial Advisers Regulations
Regulator = MAS · exam administered under SCI (Singapore College of Insurance)
MAS also issues binding Notices and (advisory) Guidelines

Regulated FA activities

Second Schedule to the FAA — three limbs: advising on investment products · issuing/promulgating research analyses or reports · arranging contracts of insurance for life policies (not reinsurance)
Marketing a CIS is no longer one of them — deleted from the Second Schedule wef 8 Oct 2018 (S 658/2018); it sits under the SFA now. Old M5 notes still say four
Carve-outs from limb 1: advising on corporate finance (SFA meaning), and anything already caught by limb 2

Licensed vs exempt FA

Licensed FA — holds a Financial Adviser's Licence from MAS

Part I · Conduct of business & disclosure

The FAA conduct duties MAS enforces — disclosure, suitability and handling of documents.

Core conduct duties

Have a reasonable basis for any recommendation
Disclose material information, product features, risks, fees & charges
Disclose conflicts of interest and any remuneration / benefits received
No false or misleading statements

Suitability / needs analysis (FNA)

Gather facts: Know Your Client — objectives, financial situation, needs
Analyse & identify needs/priorities · match to a suitable product
Document the basis of recommendation · give the client a record of advice
If client declines analysis → follow the prescribed limited-advice / no-advice process

Product disclosure documents

Product Highlights Sheet (PHS), prospectus/offer docs, Product Summary & Bundled Product Disclosure for insurance
Provide before the client commits · explain, don't just hand over

Part I · Product classification & suitability gates

EIP vs SIP, and what CKA vs CAR each trigger. Know which gate a product opens.

EIP vs SIP

EIP = Excluded Investment Product — simpler/well-understood (e.g. plain shares, straightforward bonds, some funds)
SIP = Specified Investment Product — more complex (e.g. derivatives, structured products, certain complex funds)
Exact classification lists sit in MAS notices — check current MAS notice / SCI guide

CKA — Customer Knowledge Assessment

Triggered before recommending an unlisted SIP · FAA-N16 paras 15–27D, Annex 2
Checks the client's knowledge or experience in that product — via education, investment experience or work experience; withholding the information = deemed fail
A pass is valid 1 year — and the adviser must still offer to provide advice
A fail does not ban the sale: it triggers a duty to advise; if the client insists on a product you did not recommend, independent senior management approval is required

CAR — Customer Account Review

Triggered before recommending a listed SIP ·

Part I · AML/CFT — CDD, red flags & STR

Anti-money-laundering duties. Know the CDD steps, red flags, and the STR / no-tipping-off rule.

CDD — the steps

Identify & verify the customer (and any person acting on their behalf)
Identify & verify the beneficial owner
Understand the purpose & intended nature of the relationship
Ongoing monitoring of transactions

Risk-based approach

Simplified DD for lower risk · Enhanced DD (EDD) for higher risk
PEPs (politically exposed persons) → EDD + senior-management approval + source-of-wealth checks
Screen against sanctions / watch lists

Red flags

Reluctance to provide ID / beneficial-owner info · unusual source of funds
Transactions with no clear economic purpose · unexplained complexity
Early surrender / cancellation for a refund, third-party payers, structuring

STR — report, never tip off

On suspicion → file an STR

Part II · Fair Dealing & the Balanced Scorecard

MAS's fair-dealing outcomes and how remuneration is aligned to them.

Fair Dealing — the 5 outcomes

1 Culture of fair dealing led by the board & senior management
2 Products/services suitable for the target segment
3 Competent representatives with quality advice
4 Clear, relevant, not misleading information
5 Complaints handled independently, promptly

Balanced Scorecard — purpose

Aligns rep & supervisor pay with fair dealing, not sales volume alone
Non-sales KPIs (suitability, disclosure, needs analysis) feed the grade

Balanced Scorecard — mechanics

Reps graded (e.g. A–E style tiers) · poorer conduct → lower grade → pay impact
Independent sales audit & post-transaction checks feed grading
Grade bands, weightings & clawback per the notice — check current MAS notice / SCI guide

Remuneration & spreading

Part II · Ethics & professional conduct

The ethical duties and reasoning the exam expects — put the client first, always.

Core ethical duties

Client's best interest first · integrity & honesty
Competence — advise only within your knowledge
Confidentiality of client information · objectivity

Managing conflicts

Avoid conflicts where possible; otherwise disclose and manage
Don't let commission / incentives drive the recommendation
No misrepresentation, churning, or unsuitable switching

Ethical decision-making

Is it legal? fair? in the client's interest? Would it withstand scrutiny?
Distinguish compliance (the minimum) from ethics (doing right)
When unsure → escalate to compliance / supervisor

Consequences of misconduct

MAS actions: reprimand, fines, prohibition orders, revocation of licence/appointment

Part II · Skills — financial planning & the numbers

The 'Skills' half of RES5: the advisory process, the key ratios, and the time-value-of-money maths that scenario questions test.

The financial planning process

1 Establish the relationship & scope of engagement
2 Gather data & set goals (fact-find / needs analysis)
3 Analyse & evaluate the client's financial situation
4 Develop the recommendations
5 Implement the plan
6 Monitor & review periodically

Key financial ratios

Savings ratio = savings ÷ gross income
Liquidity ratio = liquid assets ÷ monthly expenses (rule of thumb ~3–6 months)
Debt-servicing ratio = monthly debt repayments ÷ gross monthly income
Net worth = total assets − total liabilities

Time value of money

A dollar today is worth more than a dollar later (it can be invested)
Rule of 72: years to double ≈ 72 ÷ annual % return
A higher discount rate → a lower present value
Real return ≈ nominal return − inflation

Exam day essentials

Format, weighting and technique. Confirm current arrangements with SCI before your sitting.

Format & weighting

RES5 = Rules, Ethics & Skills for Financial Advisory Services
150 MCQs · 3 hours · Part I Rules & Regulations 110 Qs · Part II Ethics & Skills 40 Qs
Pass: ≥75% Part I (83/110) AND ≥80% Part II (32/40) — must clear both
No negative marking — never leave a blank · confirm current figures with SCI

Logistics

Booked & sat via SCI · bring two IDs — Singpass app + physical photo ID (w.e.f. 8 Dec 2025) · own non-programmable calculator
Confirm venue, duration and permitted items with SCI — check current SCI guide

Technique

Watch for NOT / EXCEPT and 'BEST' in the stem
Answer every question · flag & return to hard ones
For scenario items: identify the duty/rule

Quick answers

Who counts as a 'representative' under the Financial Advisers Act?: Broadly, an individual who carries out a regulated financial advisory activity (such as advising on or arranging investment products / life policies) for or on behalf of a licensed or exempt financial adviser. Appointed representatives must be fit and proper and are recorded in the MAS Register of Representatives. Confirm the current definition and any thresholds against the FAA and current MAS notices.
What is the difference between a licensed and an exempt financial adviser?: A licensed financial adviser holds a Financial Adviser's Licence from MAS. An exempt financial adviser (for example certain banks, insurers, capital markets services licence holders) is exempt from the licensing requirement but is still subject to the FAA conduct-of-business rules. The precise categories and conditions are set out in the FAA and its regulations.
When is a Customer Knowledge Assessment (CKA) versus a Customer Account Review (CAR) required?: Both come from MAS Notice FAA-N16 and split on listing status: a CKA applies before recommending an unlisted Specified Investment Product (SIP), a CAR before recommending a listed one. A positive CKA is valid for one year, a positive CAR for three. Neither is a suitability check, and a pass does not end the process — the adviser must still offer to provide advice notwithstanding a positive outcome. Excluded Investment Products (EIPs) trigger neither. The exact product classifications sit in the notice's annexes.
What must a representative do when they suspect money laundering?: File a Suspicious Transaction Report (STR) with the Suspicious Transaction Reporting Office (STRO) — not with MAS — as soon as reasonably practicable, as required by section 45 of the CDSA; terrorism-financing suspicions are also reportable under the Terrorism (Suppression of Financing) Act. STRs are filed electronically via the STRO's SONAR platform. Never tip off the customer that a report has been or may be made: that is a separate offence under section 48 of the CDSA. Continue to apply CDD and keep records. See the current MAS AML/CFT notice and the SCI guide for details.
What is the MAS Balanced Scorecard framework?

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Tip: print this page (Ctrl/Cmd + P) for a revision sheet. Unofficial and not endorsed by MAS or SCI — verify every rule, figure and threshold against the current MAS notices and SCI study guide before relying on them.