I'm Wondering if There Will Be a Place for the Agent in Trump Care?

[nylife11023]

This was a good idea that was poorly (terribly) designed. The analogies that come to mind are the Microsoft cell phone and Zune as well as their Vista system (and some say Windows 10) as well as the Samsung's Galaxy Note 7, and before my time the Ford Pinto or Chevy Vega.

There is a lot of butt-hurt on The Street about the DOL rule, especially by the large BDs and wire-houses.

But fear not. Try to keep in mind that both the legislative and the executive branches of every state and the federal level are one-third paid-for and owned by the financial sector (the other two-thirds are shared by big-pharma and the oil patch.)

The rule will be changed or amended. I don't think it will be abolished as trying to sell against the idea that advisors should always work in the client's best interest and not that of the broker is difficult if not impossible.

As part of this amendment process, I would not be surprised to see insurance agents be brought under this rule nor would I be surprised to see any product that is indexed to equities be stripped away from the insurance sector and placed in the hands of federally licensed dealers and brokers (i.e. Series 7 holders.)

"May you live in interesting times" - said to be a Chinese curse: "寧為太平犬，莫做亂離人

 

[kgmom219]

Not exactly, but kind of close.

1.
It only applies to IRAs and other Qualified Retirement Accounts.
(such as a 401k/403b/SEP)


2.
It does not eliminate Commissioned sales.

It does create a higher standard of "Suitability" and much higher standard of Liability for Commissioned sales. It also puts the B/D on the hook for Suitability and not just the Advisor. So the big financial firm behind it all now has A LOT more skin in the game on a sale. (again, only for an IRA or other qualified plans)

This is all done via the BICE clause of the regulations.


3.
It will reduce income for some, but not all. Just the threat of this legislation has started to cull out a lot of the "bad" products that really had no place being sold anyway. Of course those products paid the highest comp.

Stock Jocks who sell the "fund of the day" will certainly see a hit. As they should imo.


- The real problem with this is not how it affects Advisors, but how it affects Consumers. Any advisor with half a brain can adapt and survive this legislation easily.

The problem is big BDs are not willing to accept the increased liability (they dont trust their own stock jocks advice... go figure). So all the small IRA accounts (think under $1mm) are being pushed into RoboAdviser Accounts. That means no more custom tailored retirement advice for mom and pop with their tiny $500k IRA... but done worry, the computers have your back.

Mine was close enough for health insurance sales people