Equity Indexed Annuities: Are they the real deal or junk products?
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Are you State or Fed RIA, CFP, fee only, etc. For 17 years (15 Series 7, 2 years State RIA)I hung out with my brethren in the securities coral. I know how many think, what they say and how they act. Some are good ...some are bad.
If you are a State RIA, I really don't think the State SEC has anything against you jumping in her. If you are a CFP there isn't anything in the membership that says you can't get on a forum.
Jump on in...
If you are a State RIA, I really don't think the State SEC has anything against you jumping in her. If you are a CFP there isn't anything in the membership that says you can't get on a forum.
Jump on in...
The NASD is about taking its annual $500 fee (is it more these days). Period! The BD is all about taking 30,40,50 percent of your commission. Period! They are all in it together. If you go back and investigate, the NASD was never to be the only SRO for the BD's. They have remained the only SRO through manipulation of power.
Regulate Thyself (Better)
"In the wake of the Wall Street scandals of the past few years, it was inevitable that government regulators would take a look at how the self-regulatory organizations (SROs), such as the NYSE and the NASD, were doing their jobs. If the SROs were really on the ball, why did so many abuses occur? "
Two-Tiered Justice?
"However, a recent SEC report shows that the NASD is far less enthusiastic about policing itself — despite the fact that such self-regulation is part of its charter."
Another NASD Election, Another Brawl?
"It's that time again — time for another NASD election, and with that the inevitable impassioned debate over whether the regulator is beholden to the big wirehouses that pay the lion's share of dues, to the detriment of the independent majority."
RR Commentary
"Never has so much time and effort been spent by the Commission and the NASD to accommodate the wishes of just a few powerful member firms to the disadvantage of other firms, registered representatives ("brokers"), other industry employees and investors."
SEC's Inspector General Silent on SRO Oversight
"The SEC charged that large market makers conspired to fix Nasdaq quotes and that the NASD knew about it. Other regulatory failures were discovered as well, leading SEC Chairman Arthur Levitt Jr. to claim that "the NASD did not fulfill its most basic responsibilities." Levitt acknowledged that the SEC "should have acted sooner" in cleaning up the problems."
This fight was going on around the time I was going State RIA. My State SEC guy sid they would fight tooth and nail to not let the NASD power grab.
The NASD's Power Grab
"The NASD is worried that brokers are playing a game of "regulatory arbitrage"--giving up their securities licenses to become investment advisers (IAs) and thereby sidestepping strict SRO oversight for lax adviser supervision. In response, the SRO has asked the SEC for regulatory authority over advisers (which it hasn't gotten, at least not yet)."
NASD Slips Liability-Limiting Clause into Restriction Agreements
""The National Association of Securities Dealers is taking some heat for a new clause it quietly inserted in some broker/dealers' restriction agreements that limits a member's right to sue the SRO. The wording, added to some new agreements this year, requires a member firm to agree that it can sue the NASD only in cases of "willful malfeasance" by the regulator."
SROs to SEC: "We Like Our Cartel"
"SROs to SEC: "We Like Our Cartel"
The NASD and the NYSE have warned the SEC about the dangers of allowing upstart SROs to regulate alternative trading systems. But the NASD and the NYSE blasted the idea of competing SROs."
NASD Member Calls for Boycott of NASD Election
"In 1993, Davidson had a run-in with the NASD when he garnered enough signatures to challenge a board candidate chosen by NASD District 10's nominating committee. He subsequently sued the NASD for alleged mishandling of the election. The SEC and the NASD's own Rudman Committee later criticized the NASD for improper conduct in the contest. But a New York federal court threw out Davidson's claim last June on the grounds that NASD members have no right of action against their regulator."
When I was a State RIA it was a breath of fresh air because I was governed by the State Securities Administration. They are not about gaining power and wealth for the corporation. Do you know the NASD is a Corporation?
Need I go on? Signing on with the NASD is like signing on with the devil.
The Long Arm of the NASD
"Yes, NASD is entitled to great leeway when it makes demands during an investigation. However, “great leeway” does not mean carte blanche. What the self-regulator too often forgets is that members and their associated persons are denied the protection granted to citizens in a state or federal court when it warns: There is no constitutional due process at the NASD…there is no Fifth Amendment protection. The SEC admonishes that such constitutional protections: “are not available when NASD makes a Rule 8210 request; in such a case, the only recourse against possible overreaching by NASD is for the person to whom the request is directed to refuse to comply, and to appeal any consequent disciplinary action to the Commission…”
My record for the 17 years I did security stuff is squeaky clean, not one complaint. For the 25 years I've had an insurance license, I've never had one complaint.
Can you tell that I feel the NASD /SRO situation needs some competition?
Regulate Thyself (Better)
"In the wake of the Wall Street scandals of the past few years, it was inevitable that government regulators would take a look at how the self-regulatory organizations (SROs), such as the NYSE and the NASD, were doing their jobs. If the SROs were really on the ball, why did so many abuses occur? "
Two-Tiered Justice?
"However, a recent SEC report shows that the NASD is far less enthusiastic about policing itself — despite the fact that such self-regulation is part of its charter."
Another NASD Election, Another Brawl?
"It's that time again — time for another NASD election, and with that the inevitable impassioned debate over whether the regulator is beholden to the big wirehouses that pay the lion's share of dues, to the detriment of the independent majority."
RR Commentary
"Never has so much time and effort been spent by the Commission and the NASD to accommodate the wishes of just a few powerful member firms to the disadvantage of other firms, registered representatives ("brokers"), other industry employees and investors."
SEC's Inspector General Silent on SRO Oversight
"The SEC charged that large market makers conspired to fix Nasdaq quotes and that the NASD knew about it. Other regulatory failures were discovered as well, leading SEC Chairman Arthur Levitt Jr. to claim that "the NASD did not fulfill its most basic responsibilities." Levitt acknowledged that the SEC "should have acted sooner" in cleaning up the problems."
This fight was going on around the time I was going State RIA. My State SEC guy sid they would fight tooth and nail to not let the NASD power grab.
The NASD's Power Grab
"The NASD is worried that brokers are playing a game of "regulatory arbitrage"--giving up their securities licenses to become investment advisers (IAs) and thereby sidestepping strict SRO oversight for lax adviser supervision. In response, the SRO has asked the SEC for regulatory authority over advisers (which it hasn't gotten, at least not yet)."
NASD Slips Liability-Limiting Clause into Restriction Agreements
""The National Association of Securities Dealers is taking some heat for a new clause it quietly inserted in some broker/dealers' restriction agreements that limits a member's right to sue the SRO. The wording, added to some new agreements this year, requires a member firm to agree that it can sue the NASD only in cases of "willful malfeasance" by the regulator."
SROs to SEC: "We Like Our Cartel"
"SROs to SEC: "We Like Our Cartel"
The NASD and the NYSE have warned the SEC about the dangers of allowing upstart SROs to regulate alternative trading systems. But the NASD and the NYSE blasted the idea of competing SROs."
NASD Member Calls for Boycott of NASD Election
"In 1993, Davidson had a run-in with the NASD when he garnered enough signatures to challenge a board candidate chosen by NASD District 10's nominating committee. He subsequently sued the NASD for alleged mishandling of the election. The SEC and the NASD's own Rudman Committee later criticized the NASD for improper conduct in the contest. But a New York federal court threw out Davidson's claim last June on the grounds that NASD members have no right of action against their regulator."
When I was a State RIA it was a breath of fresh air because I was governed by the State Securities Administration. They are not about gaining power and wealth for the corporation. Do you know the NASD is a Corporation?
Need I go on? Signing on with the NASD is like signing on with the devil.
The Long Arm of the NASD
"Yes, NASD is entitled to great leeway when it makes demands during an investigation. However, “great leeway” does not mean carte blanche. What the self-regulator too often forgets is that members and their associated persons are denied the protection granted to citizens in a state or federal court when it warns: There is no constitutional due process at the NASD…there is no Fifth Amendment protection. The SEC admonishes that such constitutional protections: “are not available when NASD makes a Rule 8210 request; in such a case, the only recourse against possible overreaching by NASD is for the person to whom the request is directed to refuse to comply, and to appeal any consequent disciplinary action to the Commission…”
My record for the 17 years I did security stuff is squeaky clean, not one complaint. For the 25 years I've had an insurance license, I've never had one complaint.
Can you tell that I feel the NASD /SRO situation needs some competition?
- 2,908
No, it's Allianz. Don't know about the design of the product now, but the largest selling EIA in the country was the Masterdex10. The frigging thing was designed like a lobster trap where you could get in but could not get out, or walkaway without annuitizing. Yes, agents had an obligation to emphasize what Allianz tried to downplay but basically their marketing was strong but shoddy and those plans have been and continue to be timebombs as clients come up to the time when they think that they can take their funds and walkaway but can't. Nasty product and yes I understand that it is right for some blah, blah, blah. Nasty.
Winter
- 403
Publicity seems to have pushed the SEC to say they'll do something this year about EIAs as securities.
When the SEC issued the safe harbor rule (1986), they said indexed products (which would include all current EIAs) were all outside the safe harbor. If they are securities, they all have to be in separate accounts. The going could get rough.
When the SEC issued the safe harbor rule (1986), they said indexed products (which would include all current EIAs) were all outside the safe harbor. If they are securities, they all have to be in separate accounts. The going could get rough.
- 924
The Masterdex10 was a huge improvement over the Bonusdex and the new + lines are an improvement over either.
Jeez, this is getting like auto sales: NEW AND IMPROVED FOR 2008.
But seriously, the Masterdex10 could be a good fit in an IRA. Think about it: A 10% bonus compounded over the life of an IRA, especially if stretched, together with the fact that it is not likely that you would want to just cash in an IRA --it fits in some situations. It really does. Allianz also had very fair caps in the MD10 and 100% participation. On the whole, I think Allianz plays pretty fair with customers.
Jeez, this is getting like auto sales: NEW AND IMPROVED FOR 2008.
But seriously, the Masterdex10 could be a good fit in an IRA. Think about it: A 10% bonus compounded over the life of an IRA, especially if stretched, together with the fact that it is not likely that you would want to just cash in an IRA --it fits in some situations. It really does. Allianz also had very fair caps in the MD10 and 100% participation. On the whole, I think Allianz plays pretty fair with customers.
- 2,908
It was acknowledged that it could be okay for some. That is not how suitability analysis works. If you think Allianz plays pretty fair with customers then that is good, because they have a pile of lawsuits pending against them and state regulatory action related to their actions so they will need all the help they can get.
Shlocky product.
Winter
And you believe that all class actions suits are merited, is that what I am hearing? I guess you also believe that people that smoke cigarettes don't know it is a bad health decision.
And we all know how knowledgeable those in government are about financial things, like....oh let's say....a country that is in debt to the tune of $trillions, a branch of government that had a passive role in the sub-prime debacle, allowed the securities firms to bundle mortgage based derivatives, etc.
Yep those are the people that know it all. NOT!!!!
Did you read anything in my post on the NASD and what they are about.
If they want to put together a test on FIA's that you must pass to be able to sell them, that's a reasonable position. But to lump them in with securities is just nonsense.
Current law allows cash value life and the interest is based on what the company invests in to pay that interest. The same is true with traditional annuities or dividend paying life products. I don't think the law says what instrument the insurance company can invest in to pay the returns on their products. Historically they've invested in conservative products. What if they want to invest in their own insurance company account in the stock market? Then they can pay the interest on their insurance products based on their own, insurance company funds.
If the NASD gets into the FIA business you can kiss your job, as it now exists, goodbye. Your E&O costs will increase, your fees to do business will increase, your administration nightmare would begin.
And we all know how knowledgeable those in government are about financial things, like....oh let's say....a country that is in debt to the tune of $trillions, a branch of government that had a passive role in the sub-prime debacle, allowed the securities firms to bundle mortgage based derivatives, etc.
Yep those are the people that know it all. NOT!!!!
Did you read anything in my post on the NASD and what they are about.
If they want to put together a test on FIA's that you must pass to be able to sell them, that's a reasonable position. But to lump them in with securities is just nonsense.
Current law allows cash value life and the interest is based on what the company invests in to pay that interest. The same is true with traditional annuities or dividend paying life products. I don't think the law says what instrument the insurance company can invest in to pay the returns on their products. Historically they've invested in conservative products. What if they want to invest in their own insurance company account in the stock market? Then they can pay the interest on their insurance products based on their own, insurance company funds.
If the NASD gets into the FIA business you can kiss your job, as it now exists, goodbye. Your E&O costs will increase, your fees to do business will increase, your administration nightmare would begin.
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