Annuity selling and the series 65

[J2727]

You don't need the series 65 to sell annuities.

However, annuity selling does involve discussing investments and at times recommending someone sell a security (stock, etc.) to purchase an annuity (for lifetime income, etc.).

Aside from documenting everything thoroughly and the annuity being suitable for the client, are there any issues with not having a series 65?

 

[Tahoe Ray]

However, annuity selling does involve discussing investments and at times recommending someone sell a security (stock, etc.) to purchase an annuity (for lifetime income, etc.).

This is a huge issue and you shouldn't do that. You can talk conceptually about markets, risk, etc. but making a specific recommendation about selling any security is a big no-no.

You know the client has the money. Present the solution to their problem (lifetime income) and let them decide how to fund it.

 

[DHK]

Did you read the "Sticky"? It's a pretty good overview.

https://insurance-forums.com/community/threads/new-annuity-suitability.95909/

Keep in mind that even the DOL regulation would allow insurance-only agents to discuss investments as long as they were giving general education and not giving specific investment advice: no selling, buying, holding, or any analysis of the underlying securities.

The decision to buy an annuity should be based on the annuity's features and benefits that the client wants and happens to fund it from their securities portfolio. Not "you should fund this annuity with your 401(k)."

Also, beware if the client says "how much should I buy?" Keep the recommendation based on "how much guarantees do you want for your money?" or "To guarantee $30,000 per year under the lifetime income benefit rider at age 65, we need to fund the annuity with $600,000 @ 5% per year."

 

[J2727]

This is a huge issue and you shouldn't do that. You can talk conceptually about markets, risk, etc. but making a specific recommendation about selling any security is a big no-no.

You know the client has the money. Present the solution to their problem (lifetime income) and let them decide how to fund it.

Did you read the "Sticky"? It's a pretty good overview.

https://insurance-forums.com/community/threads/new-annuity-suitability.95909/

Keep in mind that even the DOL regulation would allow insurance-only agents to discuss investments as long as they were giving general education and not giving specific investment advice: no selling, buying, holding, or any analysis of the underlying securities.

The decision to buy an annuity should be based on the annuity's features and benefits that the client wants and happens to fund it from their securities portfolio. Not "you should fund this annuity with your 401(k)."

Also, beware if the client says "how much should I buy?" Keep the recommendation based on "how much guarantees do you want for your money?" or "To guarantee $30,000 per year under the lifetime income benefit rider at age 65, we need to fund the annuity with $600,000 @ 5% per year."

I see both your points. Yes I saw the sticky and agree with all of it.

Seems like someone without a series 65 has to talk "around" giving direct advice when it comes to annuities. This seems terribly constricting.

Why not just get the series 65 then?

 

[DHK]

It depends on what you like and not like.

First, there are a few RIAs that target insurance-only agents to "pitch" them that they need a series 65 for regulatory concerns, etc. These were half-truths at best... IF one knows how to do the "talk around".

Second, in my opinion, FIAs directly compete with AUM services. And while RIAs are about fiduciary securities selection for the client... it can make any commissions you earn subject to the fiduciary standard.

Third, do you want to deal with clients who *may* call you up in a panic when the market dips 800 points... because of the news headlines? (Today, 800 points out of nearly 26,000 is about a 3% correction. It's nothing.) Clients have a "pain threshold" and do you want to have to deal with it?

Fourth - what are you doing to EARN those ongoing fees? Can you justify the fees your clients are paying you? How? Otherwise, it's possible to have a complaint for "reverse churning" (meaning not making changes in the total portfolio and not meeting with clients).

Fifth - how many clients can you handle with investments compared to being insurance-only?



Just a few thoughts.