College Funding market

I have in the past owned an 401k, set up a 401k with matching funds when I owned my IT services for over 70 employees, IRA, Roth, purchased stock from a broker for years and currently have a mutual fund. I also have purchased WL insurance, term insurance and IUL polices. All of these were not sold to myself. I still have my WL, IUL and term policies. The rest are all past tense. Why would I not be allowed to share my own personal experiences with folks?
 
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.

I certainly have/had/do. (My ChFC is a Series 65 exempt designation and I've held 7 & 66 licenses.) The secret of the comparison is to show where the weak points are for life insurance as well. If life insurance is "too perfect"... you'll have a problem.

I have my own comparison chart comparing permanent life to 401k/IRA, 529, Roth, and after-tax mutual funds (generically) on 24 different comparison points. I call this piece "Investment Grade" Life Insurance - the Incomparable Asset.

On those 24 points, there are two where there are specific weak points of permanent life insurance: Contributions are not tax-deductible and that you don't get favorable capital gains rates on gains over 12 months. Also, on the point of "plan solvency"... where if you can't contribute to the plan over a long-term, the plan can work, but you'd have to reduce the death benefit to minimize expenses - ideally without making the contract a MEC.

Let's just say that with my understanding and the way I've created my materials (and I'm a reasonably detailed person), I have no fear of being put in front of a jury to back up my recommendations.
 
The other problem on this thread is what people assume college planning is all about. It's about repositioning assets into life insurance and annuities to lower the EFC. It's not necessarily about paying for college out of pocket. Therefore, repositioning assets into life insurance and annuities isn't all about college, but about positioning those assets for long-term retirement income planning... with the secondary benefit (for otherwise includable assets) of being exempt from the FAFSA reporting requirements.
 
Some believe that all a life insurance agent can and should do... is just present insurance solutions to people who want insurance solutions. And that you cannot do anything else that isn't "incidental to the purchase of insurance products".

While it may be the "Safest" way to go for compliance, it isn't necessarily the best way to serve people.

You need to know taxes, legal work, and investments. You just can't give tax filing advice, prepare legal documents, or give specific investment advice without the proper training and licenses.

If you're not allowed to learn this stuff and use it to help your clients... then what's the point of earning a CLU designation? Most of this knowledge is included in that course of study. If you can't use it, why study for it?

You just need to know the right limits - and those limits can vary from state to state. From what you can call yourself, from transferring funds from a securities portfolio into fixed insurance products - you just need to double-check. And this forum doesn't count as "double-checking".

Here's an example: Some time ago, I contacted American National regarding partial transfers from a brokerage firm. This was their response to me:

As far as transferring securities into an annuity, we ask the question on our Suitability Form as to the source of funds to purchase the annuity. We can accept securities instruments albeit stocks, bonds, mutual funds, etc. to fund the annuity contract. When we look at all of the account paperwork and perform a suitability review, we look at all of the information noted on the Suitability Form as a whole and not just the source of funds.

As for mechanics, if the assets are housed inside of a brokerage acct., the client should liquidate their positions to cash (still maintaining them inside of the IRA within that brokerage statement to preserve the tax-sheltered status). The client will complete form 4394-Q which is our Authorization to Transfer Qualified Funds to ANICO. When filling out Sec. 3, the client will need to indicate that they want to transfer their IRA and then on the application, they will check that they are setting up an Individual Retirement Annuity. We always recommend sending in a copy of the client’s most recent brokerage statement as that indicates all of the pertinent information that the admin. area will need in order to
go after the funds to complete the transfer. If you would like to include a letter of instruction along with the paperwork, it is always helpful (not required, but helpful). If you have any questions in completing the paperwork, please feel free to reply back or call our Field Support Center at the number listed below. Happy Holidays!

[...]

Yes, you can do a partial transfer out to set up a new Individual Retirement Annuity. I don’t think I have ever experienced a brokerage company requiring any client to liquidate all of the assets inside of their IRA in order to do a full transfer. My understanding is the big major brokerage houses allow for partial transfers. ANICO, however, as a carrier is to accept and report (to the client and IRS) on those assets housed inside of a qualified annuity contract. If the client wants to move only a portion of their assets out of their IRA to transfer it into a fixed or indexed annuity with ANICO, we can accept the assets. As for investment advice, we don’t require agents to be series 6 or 63 licensed.

Ask your companies and keep documentation of their answers. THAT is doing your due diligence.
 
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.

These are not client facing. that tells you a bit
 
Here's MassMutual's guide on college financial aid assets - with no "for agent use only" disclosures.
 

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I have in the past owned an 401k, set up a 401k with matching funds when I owned my IT services for over 70 employees, IRA, Roth, purchased stock from a broker for years and currently have a mutual fund. I also have purchased WL insurance, term insurance and IUL polices. All of these were not sold to myself. I still have my WL, IUL and term policies. The rest are all past tense. Why would I not be allowed to share my own personal experiences with folks?

I own Auto and Home insurance... I dont dare try to give any advice to clients surrounding either.

I can do basic maintenance on a car... but I dont dare call myself a mechanic.

Was your 401k Plan 404c compliant? Were you the advisor on the Plan? What was the QDIA? Was it bundled or un-bundled?

You can share your own personal experience, but none of that experience made you an expert in any of that (other than IT work). Especially in the eyes of Regulators.
That is why you hopefully used trusted advisors to put it all in place. Even if you didnt use an advisor, a single experience with a single product gives you a minuscule amount of experience.

Use your experience to help shape how you present your products. Use your experience to position the products to be solutions to problems you are familiar with from your experiences. But dont use your life experience to call yourself an expert in those areas... not without real technical training, study, licenses, designations, etc.
 
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