Agent Licensing test is hard

[KathiMR]

How can one sell a product that's part of a complete financial solution unless they understand all the options available before recommending only the insurance product they're licensed for?

Wow. That’s rich for an industry where it is common for those who are only life agents to pose as retirement experts. & so they only have fixed income products.
I feel very strongly that anyone trying to discuss retirement have a securities license. So those that are only life licensed need to have experienced agents/reps who can deal with the full scope of needs for retirement & anything else. & if necessary refer for other help. & of course being aware of what one is not.
So I was not pleased to get newsletters from my health agent who the record shows was formerly securities licensed but not now, trying to scare people about the market & saying he has a product that pays 2%. (That was a couple years or so ago before inflation took off).

 

[rousemark]

I did do some google searches some time ago to see if there was one... and couldn't find one.

I'm certainly open to learning about it, but I doubt we'll find many. Well, certainly compared to lawsuits and complaints on agents selling permanent life in inappropriate ways.

Well, you may be right buy t still seems to me I heatd about it happening many years ago. I did not find one on Google either and I do not pay for Nexus. Btw, welcome back.. When did you decide to retun?

 

[DHK]

Well, you may be right buy t still seems to me I heatd about it happening many years ago. I did not find one on Google either and I do not pay for Nexus. Btw, welcome back.. When did you decide to retun?

Thanks. Just the other day. I chimed in on the Ohio National thread on their software. (Strange product.)

 

[Allen Trent]

Our co covers us. & they also very carefully scrutinize especially annuity transactions & rollovers.
This was a PENSION, not a 401k. Yes I disclosed. She is 60 so some of that does not apply. & yes it was an IRA.
& she is still unemployed. We have a special form that shows fees. But w a pension of course they don’t show separate fees.
We are very carefully scrutinized when doing rollovers & investing in annuities. & of course annuity is long term investment. & we are required to make sure they have plenty of other liquid funds. I forget allowable ratio but there is also 401k & Roth. & savings. Would NEVER put someone in an annuity unless it was understood to be long term & there was a large % in more liquid assets. & of course we have to be aware of what are taxable events.
Now I wish former employees were required to tell departing employees w a 401k that they could roll it to an IRA. Some years ago I met w a young couple. He was AF reserves I think it was & had left a previous employer. Neither old employer would allow 401k to be left, nor would New employer accept old 401k. & no one informed him that he could roll it to an IRA. So he withdrew it & of course took big hit. He would have rolled it over if he had known. But by the time I met him it was too late.
W this though we have disclosure brochures they get. & special rollover form asking all those questions. & then the co takes a careful look. To make sure it is in clients best interest. & especially w the more highly compensated products.
This has attractive living benefits & oh yeah w daily step ups in income base until withdrawals are taken.
& Btw from the very beginning it was stressed to ALWAYS do what is best for client—not what pays us more like too many agents do. & we see some of those results dealing w clients w other products.
So when we had new fiduciary duties it seemed like what we had ALWAYS been taught to do. Just w more documentation required.
In this case she is very good friend so even more wanting to do what is best. & English is her 4th language. So rolled from pension into VA in IRA so has guarantees that pension did not. Apparently no cost of living increases. This has already stepped up & likely many more to come. But part of strategy to help her retire ASAP. But not there yet. Will be looking at 401k when she can get access to her account along w her SS statement to see how close she is to desired retirement goals.
& as I her I told her she needed to apply for unemployment ins & also get health ins. & referred her to an agent who referred her to a more COBRA familiar agent.
So it took a lot of time working with her & not done yet. Of course anyone who ever does a roll over of course needs to be aware to do it properly so the client does not get the money but if a check it is made out to fbo. 1 of the most basic things I learned years ago to protect clients from taxable events. But referring them to tax advisor of course for other than the basic consequences of taking possession of the funds. Don’t want to go anywhere near a client complaint for either life or investments.

Is the new plan protected by the pre funded PBGC fund for up to $6000+ per month like her pension was? Variable Annuities have no guarantee protection of the cash value & the Income guarantee is only guaranteed by the carrier if they are still in business. If they are not in business, the client will only have potential protection after many years when the Guaranty Association assesses other carriers for the failed carrier. Check out what is going on with Colorado Bankers Annuity clients right now

I am just pointing out that you can't be stating this is all perfect planning & better than what they had in such a guaranteed manner. It may be better or it may not.

 

[Allen Trent]

doesn't mean the pension itself is safe from its own default for lack of funding its promises.

PBGC is pre funded by all pensions paying in hundreds of dollars per year per plan participant to create the fund for any pension plans unable to fund it's obligations. Currently $6k + per month is protected for a 65 year old for life of a pension fails. So,only those very high income individuals with a pension over $70k a year risk losing a pension. Average life expectancy for a 65 year old is 19 years, meaning average pension protection is $1.3M.

Even if a fixed or index annuity is bought, at best that protection is only $250k & will take years to settle under Guaranty Association. Variable Annuity has no protection to the account value, only the guaranteed income benefit, if any, & that also has to come from a Guaranty Association that has no money in it until it assesses other carriers to pay in to cover the failed carrier

 

[rousemark]

This was the last group I read about that said that the licensing test is too hard:
[EXTERNAL LINK] - Life-Insurance Licensing Test Is Too Hard, Biased, Primerica Says

The test can be hard for folks with poor reading comprehension. Questions tend to be worded so if you don't reafd the question properly the answer on first glance may appear to be true when it is actually false. But that comlaint is not about the insurance test. JUst this week a professor at NYU was let go becuase students claimed his college course was too hard. Said that thereading comprehension of students had taken a drastic drop in the last two years.. Guess us old guys need to hang around in the insurance business as long as we can.

https://nypost.com/2022/10/04/nyu-professor-allegedly-fired-after-students-say-class-was-too-hard/

 

[DHK]

Wow. That’s rich for an industry where it is common for those who are only life agents to pose as retirement experts. & so they only have fixed income products.
I feel very strongly that anyone trying to discuss retirement have a securities license. So those that are only life licensed need to have experienced agents/reps who can deal with the full scope of needs for retirement & anything else. & if necessary refer for other help. & of course being aware of what one is not.
So I was not pleased to get newsletters from my health agent who the record shows was formerly securities licensed but not now, trying to scare people about the market & saying he has a product that pays 2%. (That was a couple years or so ago before inflation took off).

Do not confuse product licensing for expertise in problems to solve. The #1 agent in the world (does business in over 50 countries - not states... COUNTRIES)... does NOT have securities licensing and he solves problems at a VERY HIGH LEVEL well beyond my understanding (and I'm reasonably savvy).

Securities licensing does NOT guarantee retirement planning competence at all.

If you're curious, his name is Dr. Sanjay Tolani and here's my webinar with him from the other day:

 

[goillini52]

& English is her 4th language.

Did I miss something? What do the # of languages she speaks have to do with the story?

 

[DHK]

I'll just add that you generally cannot do the planning that I do while being with a broker dealer.

I had a very nice conversation with a GA from a mutual company and we talked about partnering up for my marketing message. One of the things he specifically said was that he doesn't want his reps to have my materials because if they did... they'd have to get them approved by their broker/dealer compliance.

Btw, I differentiate the terms compliance and accuracy/misrepresentation.

I am very accurate and I am very good about what I represent.

I am NOT someone who wants to be subject to a company's opinion on 'compliance'.

 

[DHK]

Our co covers us.

Let me clarify this point very clearly:

The company covers themselves. That's what compliance is for - to protect the company, then the client, then the agent.

Now, if the company doesn't provide training, whose fault does that become? The company. The company is at fault. (Ever wonder why we have specific annuity product training these days? It's not for our education. It's so the company can say "yes, the agent went through product training.")

If the company provides all the disclosures, etc., and the agent/advisor doesn't go through them and just has the client initial & sign... that's on the agent/advisor.