Confusion with Series 65 Lic.?

[DHK]

You blame the regulators, of course! If I were registered with an RIA, I would say something along the lines of this:

"Mr and Mrs. Prospect, as we've discussed, we know how we are using this life insurance policy (or annuity policy) within your entire financial plan.

However, as part of the regulatory and compliance process, regulators seem to believe that "all insurance recommendations are made only because of the commissions agents can receive". As you can tell, policies like these are the only ways to ensure that (you get money when you need it to continue your plan or never run out of money).

But, to make the regulators happy, I need to disclose to you the commission I earn. And the reason is because regulators believe that commissions create a conflict of interest - regardless of how appropriate the recommendation is to your total financial plan."

Something like that. I'm sure that if you join an RIA, or you create your own, you'll have a couple of forms that would help for compliance purposes if and when you are audited.

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Btw, I'm not sure if you have to disclose the $ amount of the commission... or just the fact that you will RECEIVE a commission. I'm just not sure.

 

[walthamny]

You need to disclose that you are earning a commission, not the amount. You also can not require them to buy the commissioned product from you.(99% will buy from you) You also can not say I charge 2500 for a financial plan, but by a whole life policy from me, and then you will only pay 500 for a plan.

If you are charging AUM fees, make sure you have cost benefit analysis every time you sell an annuity.

 

[pfg1]

It is not that big of a deal. You simply list your insurance activities as an outside business activity and if you happen to move qualified money into an insurance product then you follow the compliance guidelines that will be provided to you.

This ^^^^^^^^^^^^^
Don't more of it than there is.

 

[Golfnut2112]

Thank you DHK !

Did i just read you correctly? "Writing someone an insurance policy is a "conflict of interest????" How does that work? How do you explain that to a prospect?


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It's not a conflict of intrest and no you don't need to disclose your commission.