Indexed Annuities - SEC Drops the Other Shoe

Yup. Many idiots with securities licenses gave 'professional' advice that caused the loss of billions out of the accounts of trusting investors. Securities licenses don't mean sh*t and don't impart any special knowledge or ethical superiority. But they are required to do business for a lot of products, soon to include FIA's. ;)

Wasn't Madoff securities licensed ? :)
 
You are 100% correct. Today I could develop a product that can give returns like an FIA but would not be an FIA. Unless the SEC is going to tell a company they can not buy Puts and Calls or do Bull and Bear commodity spreads and straddles, a smart insurance company can get around the rules. We may give up a few things like being able to do annual changes to what returns are based. We may just be able to say this is an annuity that has the ability to out preform traditional annuities.

Can the SEC outlaw someone showing the insurance company's equities portfolio or real estate portfolio? Can I not now, today find what any insurance company invests in to create the returns of a traditional fixed annuity. The SEC is stepping into a fight where they will need to declare everything is a security.

Do you know that today, there are 401k plans that you can sell and you don't need to be S7 or S6 licensed? The mutual funds are well known names. The admin of the 401k is less than most brokerage house or mutual fund family. Plus you get a big basket of different funds.

There are ways to legally work around egregious laws.




patch36 said:
The ruling will not be thrown out. It is about money and the lost opportunities for the securities folks to control that money and make their fees and commissions.

The annuity and life products insurance agents can offer are changing and will adapt to the new rules and those without the securities licenses will have new and improved offerings. This is like the gun control bill that passed about 7 years ago. A few days later they renamed the models of guns and the guns were back on the shelves with new model numbers and names.
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Throwing a 300 page prospectus on the paper pile instead of a 5 page statement of understanding will be fun too.

When you stop to think about, trying to look on the bright side, a prospectus is never read while a statement of understanding actually has to be explained.

Just wait until the SEC gets around to telling the insurance industry what compliance is really all about and what new forms have to be filled in "to protect the investor." Just like the Paper Reduction Act reduces paper by requiring that paper be used to explain the Act with each and every document printed.

The investor gets the bureaucrat shaft one again. So do we. I don't see one single good thing coming out of this. Not for anyone.
 
Franz Kafka said:
You will realize how ridiculous that sounds once you get your securities license.
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But why is it ridiculous? Yeah I am a young and wild eyed agent, trying to have a good attitude about everything and stay motivated.
I am not arguing with you, I am sure you have more knowledge then I do on the subject. But will you explain why that is ridiculios to think that? Help me increase my knowledge here on the subject please.
 
Ya got that one wrong my friend. You can't just hang your license indefinetly with a BD. Years ago, when they were still the NASD, the good old NASD tried to attach a minimum annual business requirment to the benefit of membership. When you have your license with the BD, you are costing them some E&O money. They aren't going to pay a premium forever and you aren't producing.

Insurance companies are more relaxed about hanging your license with them than a traditional BD. So when the BD sends you the letter that it is time for you you move, Ya gotta move. It has been so long that I can't remember, isn't there $$$$ involved whenever you move to a new BD? Why is $250 floating in the back of my mind???????

Are you finally getting the picture of the securities business. The ruling was about money for the securities firms, the ruling was about money for FINRA and the ruling was about more power for the SEC. What is missing from the picture? You and your clients are missing from the picture. Did the SEC or FINRA do one darn thing to stop Madoff from taking $billions? No!


jaugusta said:
Well we should all get our security license anyways. It will help us better serve our clients. Will we all use it? Probably not, BUT it does mean we will have more tools in our bag to serve them. So, I don't see it as any big deal myself. Two years to study for a test, not a problem.
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All I will say is, time and experience are great teachers. Sometimes understanding doesn't come until someone experiences something.

jaugusta said:
But why is it ridiculous? Yeah I am a young and wild eyed agent, trying to have a good attitude about everything and stay motivated.
I am not arguing with you, I am sure you have more knowledge then I do on the subject. But will you explain why that is ridiculios to think that? Help me increase my knowledge here on the subject please.
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Last edited:
Charpress said:
I'm going to start trying to do more business with the companies that are participating.
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Yep

URDRWHO said:
A month ago I gave money to an organization that will be part of filing suit. The SEC is going to be tied up in court for years past 2011.

I've had much smaller examples of long suits. I had a client that was involved in a 7 year judicial decision. And it was only a one liability claim.

Talking of $100 million in costs warrants hiring some high priced attorneys.
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That's the idea ;)
 
No surprise:
Coalition Sues SEC Over New Annuities Regulation

[FONT=tahoma,helvetica]
[FONT=Arial, Helvetica]WASHINGTON, D.C., Jan.16, 2009 – A coalition of insurance companies and independent marketing organizations has filed suit in federal court to overturn Rule 151A, the newly published rule by the Securities and Exchange Commission that classifies indexed annuities as securities.
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Coalition Sues SEC Over New Annuities Regulation - 1/16/2009 - insurancenewsnet.com[/FONT]
[/FONT]
 
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