Indexed Annuities - SEC Drops the Other Shoe

[xrac]

Here are some examples that may make you rethink that statement:

FINRA FEE $350
FINRA Registered Branch Office (RBO) Fee* plus SIPC sign/brochures $120.00

State Registered Branch Office Fee* (See State Registration Fees Sheet)
Here is TN for your state:

Individual Fees
Initial Reg Fee $50
Transfer/Relicense Fee* $50
Renewal Fee $50

FINRA Special Registration Review Fee** Varies
Single Session Exams (Series 6) $85
Single Session Exam (Series 63) $96.00
Registered Principal Exam (Series 26) $85.00
Uniform Investment Advisor Exam (Series 65) $135.00
Errors and Omissions Enrollment Fee (Non-Refundable) $1100
Affiliation Fee $900

The RR shall not be employed by, or accept any compensation from, any other person or entity as a result of any business activity, other than a passive investment, outside the scope of the RR’s relationship with BD without the prior written notification to BD and approval by BD. The RR acknowledges that BD may prohibit any outside business activity by the RR, or place restrictions on any such activity. The RR agrees to make the books and records with respect to
any outside business activity immediately available to BD upon request, including, but not limited to, the RR’s bank statements, income tax records and other financial information. (This means you have to get permission from your Broker Dealer BD to sell insurance, sell a comic book on ebay, or open a lemonade stand, etc. It also gives them permission to look through your bank account, any financial assets and your underwear drawer).

All RRs are expected to produce a minimum of $10,000 in Gross Dealer Concession (GDC). If a RR’s production falls
below the minimum GDC, a low production fee in the amount of $1,000 will be incurred. (That's right if you don't produce 10k in business they will make you pay them $1000. Most BDs require 50k, 100k or more in Gross Dealer Concession Commission to keep your license).

If a RR is fined a low production fee for two consecutive years, he or she must attain ½ their annual GDC production by no
later than June 30 of the current production year. That is a minimum production level of $5,000 GDC. If this amount is not
reached, the RR will be subject to termination for cause (not meeting minimum company production.)

Pursuant to FINRA Rule 1031, a RR may not “park” his or her license with a broker dealer. The relevant portions of the rule
read as follows. A RR shall not be maintained if he or she: “(1) . . . is no longer active in the member’s . . . securities
business, (2) . . .is no longer functioning as a representative, or (3) where the sole purpose is to avoid the examination
requirement . . .” (This means you need to be selling or you will lose your license you just paid all of the money above for. Oh and don't forget the extra $1000 you had to pay them for not producing enough).

Someone else already mentioned running everything through compliance. That means your advertising, emails, anything writen going to a client. If not here are the fines for that: The fine for the first offense will be 0-$250.00; for the second offense, $250.00-$500.00, for the third offense, $500.00-$1,000.00; the fourth offense will be grounds for termination.

Ok that was some of the negatives. Now on a positive note. Let's say you run into a client with $100 a month for mutual funds. That's 5.75% GDC commission which is $5.75 and lets say you get 70% of that. That's a total as earned commission of $4.02 a month.

I could go on and on but do you get the point?

What a wonderful deal. Let's all get licensed!

 

[InsureGuy5]

There will be quite a bit of litigation before anything happens. The SEC has overstepped their bounds in my opinions.

 

[xrac]

There will be quite a bit of litigation before anything happens. The SEC has overstepped their bounds in my opinions.

The fight isn't over on this:

NAFA: Rule 151A Bill Is Coming - Regulatory,Legislative and Tax Issues - Life and Health Insurance News
- - - - - - - - - - - - - - - - - -

The fight isn't over on this:

NAFA: Rule 151A Bill Is Coming - Regulatory,Legislative and Tax Issues - Life and Health Insurance News

EIA Oral Arguments Begin - Regulatory,Legislative and Tax Issues - Life and Health Insurance News

 

[xrac]

Meeks-Price Annuity Bill Arrives - Regulatory,Legislative and Tax Issues - Life and Health Insurance News

 

[SalemInsuranceGuy]

Meeks-Price Annuity Bill Arrives - Regulatory,Legislative and Tax Issues - Life and Health Insurance News

Well it's nice to see that the multi-trillion dollar a year insurance industry has some political pull.

 

[InsureGuy5]

This thing may get postponed for a while. Interesting that the variable annuity providers are also trying to call them equity based products. Shame on you MetLife.

 

[Ichiban]

This thing may get postponed for a while. Interesting that the variable annuity providers are also trying to call them equity based products. Shame on you MetLife.

Yes, no vested interest at all in that.

When I read MetLife's statement I just had to shake my head. Gee a Variable Annuity Company wants FIA's to be classified as securities I am sure they are only thinking of the consumer. (sarcasm)

Hope this passes. I am contacting my local reps and asking them to support this bill. I hope you all do as well.
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[JMO Fan]

This is like watching table tennis. Hope the ball ends up on one side or the other. It's hard to regulate a bouncing ball.

The latest from the new SEC chair's successor at FINRA:

FINRA Chair Comes To NAVA ALLISON BELL 6/9/2009

Rick Ketchum told annuity industry executives Monday that regulation of all types of annuities should be more uniform. "... I think that a rational starting point would be that every person who provides financial advice and sells a financial product is tested, qualified and licensed; ....”

FINRA reviews variable annuity sales materials for balance and fairness, the sales rep who sells the product must pass a licensing exam and participate in continuing education, and many other disclosure and review requirements apply ....

But he said FINRA believes more must be done to eliminate annuity regulatory gaps.

FINRA is to talk to ... state insurance regulators to ensure consistent regulatory requirements across all annuity products ....

“We will continue sharing information, though the real goal is to achieve greater consistency in the regulation of different annuity products, as this will foster more effective regulation and improved investor protection,” Ketchum said. ...

http://www.lifeandhealthinsurancenews.com/news/2009/6/Pages/FINRA-Chair-Comes-To-NAVA.aspx#

 

[InsureGuy5]

Yes, no vested interest at all in that.

When I read MetLife's statement I just had to shake my head. Gee a Variable Annuity Company wants FIA's to be classified as securities I am sure they are only thinking of the consumer. (sarcasm)

Hope this passes. I am contacting my local reps and asking them to support this bill. I hope you all do as well.
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Yep, it's a little nuts out there right now. I don't know whether to contact my representative about the lunacy with 151A or current health care reform. Seems like, they want to either regulate or make obsolete any products at all. What's next... life insurance?