NAIFA Gov Alert - Fiduciary Rule

[scagnt83]

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.

And to bring the discussion back to earth if you did 2 per day at $200 & 30bps you would make $120k per year.

And 2 per day is pushing the boundaries of reality for most advisors.

I am not saying anything for or against the proposed regulations, just that your example is not based on what goes on in the real world. To bring in 16 clients per day is an absurd assumption. To have any chance of doing it you would spend $700k per year in advertising. Hell, just the assumption of spending just 30min per client would mean doing a half ass job with each one. The paperwork alone would take up half of the meeting.

 

[Justin Bilyj]

Wealthfront, another roboadvisories is what this game is about. The large guys are lobbying for this change so that people just row their retirement funds into these robo-portfolio makers that will put them in any "instruments" that are deemed safe at that time i.e. money market funds, melting down bond funds (not even touching liquidity at this stage), or over priced stocks.
China just froze half their markets, people aren't allowed to sell stock....they would be jealous of this rule!

 

[BusinessOwnerGuy]

I did read the post. It is a back door way to eliminate the sale of commission-based products. The government is playing the role of the boxer who waves his left hand in the air to get your attention away from his right fist, which knocks you to the mat. Follow the logic- if they can't tax it fully, they'll remove the incentive to sell it. Someone did read the post & saw the bigger picture.

 

[insuranceconceptscindy]

I thought I would share my representative's statement at the DOL hearing. It's very interesting. The story Rep. Heck tells is about a client of a colleague of mine. Kind of cool to see what your lobbying efforts actually do. This discussion is a direct result of NAIFA's trip to Washington DC in May.
https://youtu.be/8nsFRsYHuZI

 

[Cash]

I thought I would share my representative's statement at the DOL hearing. It's very interesting. The story Rep. Heck tells is about a client of a colleague of mine. Kind of cool to see what your lobbying efforts actually do. This discussion is a direct result of NAIFA's trip to Washington DC in May.
https://youtu.be/8nsFRsYHuZI

I don't have anything to add other than good for you Cindy. And keep up the good work.

 

[walthamny]

Nice spin work by NAIFA. I watched the video and the argument made by the house member is very weak and the answer given back is also not so great. There is nothing in the new regulations from stopping Insurance agent from offering advice in the new regulations. However, Insurance agent may have to offer products that make less money for her and definetely less money for her broker dealer. Again the choices for the insurance agent before were either rollover to an IRA that invest in A shares of a mutual fund family( about 5% load and ongoing 50 to 75 basis points a year in fees) or rollover into variable annuity with on going 200 to 300 basis points a year with surrender charges. Now the variable annuity may have other benefits like Long term care riders or guarenteed withdrawal benefits and so on. Before under the suitability standards, with most insurance broker dealers you could roll over into any product and it would sail with their compliance department. At least thats what happened when I was at NY Life. Now that won't be that easy. If the 401k plan has good funds and their expenses are low, there would be almost no reason for the rollover. The client would be better off keeping it where it is. Under the suitability it is okay to roll over and increase your expenses from 20 basis points to 300 basis points a year. This is what NAIFA is lobbying very hard to keep.That would not be possible under the new regulations under most circumstances. And that is a good thing for this client. As RIA, I would talk to this client and probably charge her somewhere from 200 to 400 dollars. Cases like this always have other pieces. Now that she is a widow, life insurance, long term care, Social Security planning and changing beneficiaries all come into play. It is never just roll over the 21,000 for the old widow. But NAIFA decided to simplify the case and make it dramatic. There would be no shortage of RIA's to help this client if the regulations pass.

 

[DHK]

LOL - If FINRA doesn't like it... I don't think it'll pass:

FINRA blasts DOL