Jul 6, 2015
Can someone please post the Cliff notes version how this will impact NON VARIABLE licensed agents...????
I *think* this won't have any impact on people who aren't securities licensed.
I also think that a lot of people who are securities licensed need stricter rules as I see people get ripped off all the time.
I also don't want to have any stricter regulations on myself as I know I operate honestly and the rules are a huge pain already and my compliance department is much more thorough than they need to be or are at other firms.
I'm not sure how to balance those.
People are constantly ripped off in the securities world. And that has nothing to do with brokers.
The problem isn't so much the brokers (though there are a few), its the way the rules are in-equally applied.
With a securities license, there is a lot you can't tell your client, mostly a good thing. You can't imply or promise future returns, etc, etc.
Then the 'gold' commercials come on the radio and promise (just imply, but sounds like a promise) of these HUGE returns.
Then some real estate investment thing comes on the radio and tells me how I can get rich flipping houses.
Then I need to invest in coins.
Investments as a whole need more uniform rules. I know they are not all covered by the same regulatory agency, so its hard, but the strangeness in the rules is very bad for the average person.
You WILL be impacted regardless of being securities licensed or not.
I was with NAIFA in DC in May to lobby for changes. This will greatly impact us due to true fiduciary standard. We would be required to show every available plan that may be suitable for the client. For us brokers, no biggie, for captives- ie: New York Life, BIG problems.
Also, there will be additional paperwork involved PIOR to PRESENTATION. We will not be able to educate our clients on any products/plans, if they are rolling qualified funds. We would be required to have them read/understand/sign a complicated suitability document, send it to the carrier/s for approval and then we can start the education process. Which could take days, based on the number of carriers we represent/that are suitable.
The main issue is with qualified funds. It doesn't matter if we are writing fixed or variable- it's where the money is coming from.
This will greatly impact middle America- Average Joe. Fee based agents won't touch a $15,000 rollover- it's not worth it and/or the person rolling over can't/won't pay a fee. Average Joe comes to us because we are inexpensive, and we will show them how things really work. If we are prevented from doing that, by POLITICAL red tape, Average Joe has a high chance of losing his retirement savings because he wasn't able to see a person that could help him.
Please write your congressperson. This is a political maneuver, it's not fixing a broken system. We are regulated enough by many organizations and carriers. This was set up as a diversion, by the administration, for a few congresspeople to get out of Obama's way, while he pushed the trade bill though. It worked, and we are paying the price. We have support in Congress to have this ruling amended, but we need more.
Tell your congressperson a story about how you helped Average Joe. We do it every day. They need to know how this ruling will HURT them. Because, right now, they think it's only going to help.
Your Story Is Your Sword | InsuranceNewsNetMagazine.com
The federal gov has been going after the tax favored status of life insurance for using withdrawals & policy loans to generate tax free income in retirement for decades and has lost most of the battles. They want that tax revenue so badly they can taste it. They have been shut down with a few exceptions. This proposal is a back-door scheme to accomplish their real end result.
Somebody didn't bother to read the post.
This has NOTHING to do with the taxation of life insurance.
The example given here is for the guy who has a 15000 rollover. I am RIA and I would charge him probably one time 200 fee to do a rollover and basic asset allocation using vanguard funds. His ongoing fees would be around 30 basis points going forward. Or I would also give him a choice to use wealthfront which would charge him even less than I do. But wealthfront would not do the rollover so for a person needing hand holding my fee is better. Now when I was at NY Life, I could sell him a variable annuity for 15,000, it is true the client would not have to pay me directly any fee, but I would make about 5% and the client would pay somewhere between 200 to 300 basis points a year. Because the payment is coming from the IRA account, and not from the client's own checking account, NY Life and all other B/D's are arguing that they can't service the middle class anymore. By the way,as a RIA if I just did a 15000 rollover every half hour at 200, 48 weeks a year and 40 hours a week I would make 768,000 a year and all my clients would be better off then anything NY Life can offer.
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