Annuity/Investment Laws

Sep 24, 2015

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  1. Klutch
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    Klutch Super Genius

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    Setting up an office.. I wanted to put up a sign that reads "Annuities & Investments", do I need a security license to advertise "Investments"?
     
    Klutch, Sep 24, 2015
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  2. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    If you are advertising to the public 'investments', you'd better be able to deliver.

    Otherwise you are holding yourself out to the public a role you cannot do for them.
     
    DHK, Sep 24, 2015
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  3. Newby
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    Do you even need to ask that? You may as well put that you practice law and medicine also.
     
    Newby, Sep 24, 2015
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  4. Klutch
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    Klutch Super Genius

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    I obviously don't practice law, or I wouldn't be asking this question! ;^).

    What an idiotic law. How are annuities not classified as investments?
     
    Klutch, Sep 24, 2015
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  5. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    All securities are investments.

    Not all investments are securities.

    Fixed and Fixed indexed annuities (and IULs) are NOT securities, but they are investments.

    However, the lay public (and attorneys) don't necessarily understand this.

    If you "hold yourself out" as an 'investment advisor'... you will be judged as such.


    If you want to use "investments" in your branding and marketing, I suggest having a securities license and appointed with a B/D or an RIA.

    ----------

    Also, for the sign you say you want to put up, you are saying "Annuities & Investments" as though they are two separate things.
     
    DHK, Sep 24, 2015
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  6. Newby
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    I may have it wrong but when I was first trained on annuities they spent several days drumming into our heads that fixed and indexed annuities are NOT investments. They are insurance products.

    They said that even though the public thinks the word investment means anything you put money in and hope it makes a profit that is completely incorrect and if an insurance agent throws that word around they will lose their license.

    As far as the licensing boards go the word investment means that you are putting your principle at risk of loss even if you stay in the length of the contract.

    So if someone puts money in something and could lose some of it regardless of doing everything else correctly (like not canceling early) that is an investment and requires your securities license to sell it.

    If someone puts money into something with no risk to the principal other than early cancellation fees that is not considered an investment. You do not need a securities license to sell insurance products.

    But I do know of one agent who did lose his license due to putting the word investments in his advertising and he sold a lot of annuities until he got reported and completely lost his license.

    If you use the word investment at all I would never put it in writing and less you are licensed insecurities.
     
    Newby, Sep 24, 2015
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  7. Klutch
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    Klutch Super Genius

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    I understand this, which is why I'd be advertising "Investments", not "Securities".

    Oh well.
     
    Klutch, Sep 24, 2015
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  8. Tahoe Ray
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    Tahoe Ray Guru

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    Why don't you just advertise "retirement planning" or another term with less potential headaches.
     
  9. bobson
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    This is modern liberalism at its finest. Of course a fixed annuity is by definition an investment. You put money in to grow it.

    From Merriam-Webster:

    Definition of INVESTMENT for Kids
    1: the act of putting out money in order to gain a profit

    Now I know these stupid security laws don't allow you to say 'that word' if you hold an insurance license only.

    I wonder how many real estate agents sell 'investment' properties? Or how many pawn and coin shops sell coins or metals that are good 'investments'? I know a wine salesman that has bought cases of adult grape juice as a solid investment. He tells me he has made some great profits selling the wine later. How does a plumber make money if he can't invest in pipes and whatever else and turn around and sell it for a profit? I know I invest money back into my business. What am I supposed to say in that case?
     
    bobson, Sep 24, 2015
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  10. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    It's an old argument, and I agree that a fixed or fixed indexed annuity is an investment, but it is not a security.

    But that's a CONVERSATION you have.

    I still wouldn't hold myself out to offer "investments" unless it was securities-related.


    Yes, there are people who manage investment real estate property and call it 'investment management'. Heck, there are debt collectors that categorize their services as "financial planning".

    I still wouldn't do this as an insurance agent.

    But yeah, stick to 'retirement planning' or other phrases, and avoid "investments" in your branding, advertising, and printed materials (except as a disclosure to state that you don't offer advice regarding buying, selling, or analysis of securities.)
     
    DHK, Sep 24, 2015
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