New best practice guidelines have been issued for wealth managers in Singapore, which include new competency assessment tests. The move drew praise from the industry.

The Singapore Private Banking Advisory Group has launched a new set of best practice guidelines that would govern the city-state's growing wealth management industry, according to media reports.

Under the new rules, private banking advisors will be required to pass a competency assessment test - called Client Advisor Competency Standards (CACS) - before they can be eligible to give financial advice. Standards of market conduct will also be implemented to ensure the legitimacy of funding sources and related disclosure and transparency issues.

The new code will take effect from 1 September, reports said; the proposals were welcomed by the Monetary Authority of Singapore.

The CACS focuses on broadening and deepening the capabilities of these professionals in the provision of comprehensive private banking services. according to the MAS website.

This assessment will be administered by the Institute of Banking and Finance.The PB Code also sets out market conduct principles relating to the business conduct of financial institutions and their staff engaged in private banking activities. These principles cover areas such as ethics and professionalism, client relationship management and risk management.

"It is important for relationship managers to build trusted relationships with clients," Ravi Raju, head of Asia-Pacific wealth management for Deutsche Bank, said.

Christine Ong, Chief Executive of UBS Wealth Management Singapore, said, “The PB Code encourages private banks to invest in talent development. Ultimately, the wealth management business is a people-centric one. Clients want to deal with client advisors who understand their needs, are technically competent, and who are able to help them navigate through market uncertainties and uncover opportunities. They also want a partner who can operate within the tightened standards and regulatory requirements without compromise," said Christine Ong, chief executive at UBS Wealth Management in Singapore.

Given that Singapore is one of the world's key wealth management and private banking hubs, international firms are ramping up their presence in the jurisdiction in a bid to gain a wider share of its fast-rising wealth. According to the latest wealth report by The Boston Consulting Group, Singapore has the largest number of billionaires in the world, or about 11.4 per cent of the total population.