Encourage clients to comment on 151A

[Charpress]

Re: Encourage clients to comment on 151A!!!

Besides the people who had no losses this year in FIAs because there is no risk (the definition of investment), what about the folks who played it cagey and decided to go with a fixed rate this year as their strategy? They made 3% while folks in the market in actual "investments" lost 40%.

As I write this, the market is down 722 points. I wish I had sold myself more FIAs this past year.

 

[indaville]

Re: Encourage clients to comment on 151A!!!

It might surprise some, but comparing interest rates instead of annuity payouts, emphasizing investment returns instead of the insurance aspect, puts products outside of the existing safe harbor, Rule 151.

Many seem to think that pointing out the SEC's past failings will bolster the case against Rule 151A. I think it's the opposite. Finalizing the rule will make the SEC look a lot better to their most valuable constituents: FINRA, broker/dealers, and NASAA.

I agree emphasizing investment returns in marketing materials by some carriers was out of line. If you look at my original posts I did not bring up returns until asked about it.

Some might view the SEC's current behavior as reasons why the states should continue to regulate insurace products not the SEC/FINRA. I believe the SEC and their position has been weakened by the current market and banking conditions. Why should a regulator that has failed at its' job be given additional responsibilities? In particular a product that has no downside risk and pays a guaranteed interest rate.

Matt

 

[djs]

Re: Encourage clients to comment on 151A!!!

Besides the people who had no losses this year in FIAs because there is no risk (the definition of investment), what about the folks who played it cagey and decided to go with a fixed rate this year as their strategy? They made 3% while folks in the market in actual "investments" lost 40%.

The definition of investment is simply putting money in with the desire to make a profit. Of course, not all investments are regulated, regardless of risk.

Now, I assume what you mean is that 100% of my investment is reasonably safe, but is this true? If I put $100K into an FIA today and then in 6 months needed the money back, would I get $100K? Or would it be something less? If so, then you have risk, and suitability of the investment should be confirmed. The SEC / FINRA is usually concerned about suitability (at least the appearance of) and proper representation. I have no problem with either of these.

The rest of the SEC/FINRA overhead is a pain.....

Dan

 

[xrac]

FINRA can't supervise what they have let alone take on new responsibilities.

http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20081126/REG/811269965/1094/INDaily01

Will anyone be better off other than the B/D who will make more money and FINRA who will have more power?

 

[Franz Kafka]

IMO the issues with FIAs are NOT whether they are investments. Paying 10K to enter WSOP is an investment if you expect to make a profit. The issue is whether they are SECURITIES. In my faint memory of securities exams I recall securities are either debts (you lend money for interest) or equity (you own something hoping you could later sell for profit). So is FIA a debt or equity??

 

[padthaiforlunch]

Re: Encourage clients to comment on 151A!!!

The definition of investment is simply putting money in with the desire to make a profit. Of course, not all investments are regulated, regardless of risk.

Now, I assume what you mean is that 100% of my investment is reasonably safe, but is this true? If I put $100K into an FIA today and then in 6 months needed the money back, would I get $100K? Or would it be something less?
Dan

Well if you put it in an equitrust FIA with an ROP rider, then you could pull your premium out at any time.