- 11,277
And I can talk all day about the future of income taxation.
Have you seen this documentary?
https://www.getoffthetracks.com/
Have you seen this documentary?
https://www.getoffthetracks.com/
College Funding market
- Thread starter old rookie
- Start date
- 11,277
Nope. Not illegal. It's asset reallocation for longer term growth (not on a per-year basis, but long-term with principal protections).
I'd like to see the same restrictions made for all those "gold pushers" too who say that you can allocate your IRA to Gold. Are they making a "securities recommendation"?
- 10,329
Not illegal to recommend that someone take 401k funds and use them for Life Insurance Premium? In an effort to "fund college"?? Your kidding, right? That is exactly the kind of thing compliance training tells us not to do.
- 11,277
Let me just add this: Everything that I'm talking about, you'd better be able to back up what you're doing for the client. Check with your companies, cross your t's, and dot your i's. Take impeccable notes. You certainly can't use this thread and say "DHK from Insurance-Forums did it and he said I can too!" and expect that to hold up in court.
Let me make an observation: State Farm no longer has their field agents registered with their broker/dealer because of the whole DOL stuff. Van Mueller talked at length about all the things you can do to help people to buy life insurance and annuities. And he talked extensively about moving money out of qualified plans into life insurance. (Start the video at 3:35:35 to learn more.)
These reps are no longer securities licensed, but they're learning this stuff with a paid training session with Van Mueller. For as strict of a company as State Farm, if there were issues, they'd tell Van not to talk about it.
Let me make an observation: State Farm no longer has their field agents registered with their broker/dealer because of the whole DOL stuff. Van Mueller talked at length about all the things you can do to help people to buy life insurance and annuities. And he talked extensively about moving money out of qualified plans into life insurance. (Start the video at 3:35:35 to learn more.)
These reps are no longer securities licensed, but they're learning this stuff with a paid training session with Van Mueller. For as strict of a company as State Farm, if there were issues, they'd tell Van not to talk about it.
- 11,277
If that's the purpose... that's a problem. I completely agree with you - because 401(k) plan assets are not an includable asset in the FAFSA calculations for EFC. You and I both know that.
But it can be done for wealth transfer purposes for older people all the time. And using a 72t out of the 401(k) to fund life insurance to pay the taxes NOW instead of in retirement... can make a lot of sense (but it'll screw up the EFC calculations as the distribution will be counted as income). Particularly with Trump's 2017 tax plan now in effect - it makes it a great time to have that conversation.
- Thread starter
- #36
old rookie
Expert
- 23
Is it illegal to compare the positives and negatives of:
Life Insurance
Mutual funds
Stock market
401K
Roth IRA
IRA
Each has positives
Some have tax consequences at death
Some limit on when you can access your money
Some have guarantees
Is it illegal to discus the up and downs of each?
Am I missing something here, I am a rookie in this business. I would not knowingly recommend a "worse deal" for someone. I also do not want to go to court from suggesting a plan that I can be sued for.
Life Insurance
Mutual funds
Stock market
401K
Roth IRA
IRA
Each has positives
Some have tax consequences at death
Some limit on when you can access your money
Some have guarantees
Is it illegal to discus the up and downs of each?
Am I missing something here, I am a rookie in this business. I would not knowingly recommend a "worse deal" for someone. I also do not want to go to court from suggesting a plan that I can be sued for.
- 4,575
DOL might have been just somewhat coincidental timing. I believe this other fiduciary lawsuit issue from 2015 & subsequent transfer off of all SF funds to Black Rock may have played as much of a role in the decision to not give the impression they had SF branded funds if they really didnt. State Farm hit with excessive fees suit over target date funds
- 4,575
The problem is that you likely don't have any licenses, designations, credentials or education on those items that are stock market related. So, it is difficult to give a consumer the impression that you can fairly compare the items if you cant point to credentials that show you have a basis to give advice/recommendations on those securities related holding.
If it was no problem, you would see insurance carriers branded materials doing such pros/cons pieces. But, most all of the materials I have ever seen are training materials that are not branded or compliance approved. Everything branded or approved is all the vague information. The carriers & promoters of programs like this put the producer in a predicament to potentially play in a field they are not potentially authorized to play in when giving advice in regard to specific securities & retirement advice.
Like others have said, I would start with compliance dept and DOI to verify before you get too deep into a very time consuming & potentially expensive marketing program for college planning if it really is only selling life insurance to those that attend.
- 11,277
I disagree. Insurance companies want to be and stay purely product manufacturers where ever possible. Plus, I'd rather have insurance companies focus in their products and lowering their costs of operation than putting out "public defense" articles.
However, there are times where they will create various sales pieces. Such as this one from Ohio National comparing whole life with a 529 plan. There are similar ones from almost every company out there.
This thread has gotten way off track, with far too much trivial discussion about compliance. The topic under discussion is late stage college planning. Is it a viable market for advisers to get involved with? My experience says very likely it's not. It is a saturated market almost everywhere, especially in metro areas. Parents want and need the technical information advisers can provide, but they are extremely reluctant to pay for high quality college planning in the way they would pay for a CPA to do a complex tax return.
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