Official Now

[sman]

That email didn't say anything about a series 65.

It says "Variable Contracts". To my knowledge, that's only available if you are a series 6 or 7. You cannot sell nor be licensed for variable contracts with only a series 65.

So, they're all about protecting themselves and their B/D clients.

I have a Series 6, 63 & 65 and variable contracts license, I am well aware what is required to offer that type of business. I understand the email didn't say anything about 65. I was injecting my own thoughts regarding a Series 65. Go back and read it again, in no place did I say the company was saying a person has to have a Series 65. I was talking about how some STATES are viewing these transactions. This email is just the beginning. This will be the new trend. Some companies will fight it, but the states are beginning to take a harder stance on these transactions. Just one man's opinion.

 

[Norwayguy]

Just got this e-mail. Let's see .. how much of annuity business are rollovers from variable contracts? About 90%? Enjoy.


"TO: All active life and annuity producers
FROM: New Business Services
DATE: January 4, 2012
RE: Offering investment advice
As a reminder, no producer is eligible to offer investment advice unless he/she is licensed as a variable contract producer. Producers should note that the recommendation to replace securities such as mutual funds, stocks, bonds, variable insurance products and various other investment vehicles defined as securities is considered the offering of investment advice.
If Assurity has knowledge that a variable contract is being replaced by an Assurity product and the producer is not licensed as a variable contract producer, the application and funds will not be accepted."

This brings up an interesting point for those of us that have previously held a securities registration...Please note this email does not make mention of a FINRA registration but holding of a State Variable license. My Insurance license since May of 2000 is Life Health and Variable contracts...

 

[iceco1d]

Norway, that is a GREAT point.

As an aside, I'm curious as to how you guys feel about the shoe being on the other foot.

Coming from the securities POV primarily, I know it really gets under a stock broker's skin when an insurance guy transfers an investment account out and puts it into an indexed annuity (in fact, the word used is "shitslamming"). They basically end up indicting the insurance agent as an unqualified con artist.

So curious as to how you insurance only guys might feel/think/react if you had a client that had an indexed annuity in an IRA, and a Merrill broker transferred that account to a wrap program? Note: Securities guys typically know diddly squat about indexed annuities, especially at the wires, because they aren't even allowed to sell them.

So is the reaction the same?

 

[Franz Kafka]

The letter was definitely not state specific.

I believe the message was pretty clear; namely, one has to be security licensed either through a B/D or a state (IA). It wasn't meant to be a precise legal guidelines IMO.
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If this is going to be the trend, getting your S65 license and forming your own RIA is definitely the way to go. Being an RIA that doesn't manage any money is super easy and costs next to nothing.

You'd basically be organized as one of those fee-only financial planners that charges by the hour. You don't have discretion. You don't have custody. In fact, you have $0 AUM. Your ADV would be a cake walk.

If anyone has questions on forming an RIA, feel free to post them here or PM me. I'm happy to help (and if I can't, I can put you in touch with someone that can).

Actually I've been thinking about going back to securities since last year as I believe the market currently offers some great trading opportunities. Starting a hedge fund was something I wanted to try before I died and I've been trying to save enough money to pay for expenses for a couple of years while looking for partners (not easy with three children and a non-working spouse).

 

[iceco1d]

The letter was definitely not state specific.

I believe the message was pretty clear; namely, one has to be security licensed either through a B/D or a state (IA). It wasn't meant to be a precise legal guidelines IMO.
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Actually I've been thinking about going back to securities since last year as I believe the market currently offers some great trading opportunities. Starting a hedge fund was something I wanted to try before I died and I've been trying to save enough money to pay for expenses for a couple of years while looking for partners (not easy with three children and a non-working spouse).

Pretty neat man. Have you looked into what it takes to startup and how it's organized?

 

[scagnt83]

Norway, that is a GREAT point.

As an aside, I'm curious as to how you guys feel about the shoe being on the other foot.

Coming from the securities POV primarily, I know it really gets under a stock broker's skin when an insurance guy transfers an investment account out and puts it into an indexed annuity (in fact, the word used is "shitslamming"). They basically end up indicting the insurance agent as an unqualified con artist.

So curious as to how you insurance only guys might feel/think/react if you had a client that had an indexed annuity in an IRA, and a Merrill broker transferred that account to a wrap program? Note: Securities guys typically know diddly squat about indexed annuities, especially at the wires, because they aren't even allowed to sell them.

So is the reaction the same?

Insurance only guys understand a lot more than brokers do; but whenever a client is lost it gets under your skin (no matter who takes them from you).

But agents are fully aware that the market is the prevalent choice for most, and its certainly the prevalent choice of the media.


But heres the thing. Agents know a lot more about the market than brokers know about annuities.

Furthermore, IAs do exactly what most brokers try to do with the usual 50/50 bonds/equities portfolio.
Combine this with the arsenal of biased media attention, and then throw in the pain of loosing a client; and yeah, brokers dont like IAs... especially when they cant sell them!

 

[Franz Kafka]

Pretty neat man. Have you looked into what it takes to startup and how it's organized?

Yes. It's no more complicated than starting an RIA and doesn't have to be big.

 

[DHK]

This brings up an interesting point for those of us that have previously held a securities registration...Please note this email does not make mention of a FINRA registration but holding of a State Variable license. My Insurance license since May of 2000 is Life Health and Variable contracts...

I'm not trying to be contentious, but when my FINRA registration expired, I did not renew my Variable Contracts license.

So I have a Life Only, Accident & Health license.

Per the CA Insurance website:

Variable Contracts

Variable Contracts
Section 1758.1 of the California Insurance Code states that the Commissioner may grant authority to transact Variable Contracts to a person or a business entity licensed as a life-only agent which is appointed by an admitted insurer which is required to register itself or to register a separate account or fund with the United States Securities and Exchange Commission or to register its variable policies or contracts with the Securities and Exchange Commission.



The person or business entity must submit acceptable proof of registration with the Financial Industry Regulatory Authority (FINRA) before authority to transact Variable Contracts can be granted. There is no fee to add Variable Contracts to the life-only agent license.

 

[Norwayguy]

I'm not trying to be contentious, but when my FINRA registration expired, I did not renew my Variable Contracts license.

So I have a Life Only, Accident & Health license.

Per the CA Insurance website:

Variable Contracts

Never really gave it any thought till I saw that posted email. In Maine our Licenses are continuous and do not require renewal. But I just went to Maines DOI website and my Variable Authority is still active....Now I only dropped my securities registration 1/1/2011 so I'll have to check again next year.
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Norway, that is a GREAT point.

As an aside, I'm curious as to how you guys feel about the shoe being on the other foot.

Coming from the securities POV primarily, I know it really gets under a stock broker's skin when an insurance guy transfers an investment account out and puts it into an indexed annuity (in fact, the word used is "shitslamming"). They basically end up indicting the insurance agent as an unqualified con artist.

So curious as to how you insurance only guys might feel/think/react if you had a client that had an indexed annuity in an IRA, and a Merrill broker transferred that account to a wrap program? Note: Securities guys typically know diddly squat about indexed annuities, especially at the wires, because they aren't even allowed to sell them.

So is the reaction the same?

Since I no longer have a securities registration I can not offer advice on securities, My point of view is that I explain how my product works the pros and cons of what I'm selling and them ask them if they want that, then its a question of funding it ie transfering the money from the other account they now don't want.

I've been watching the new storm rising since 151a failed about source of funds and wether I need to get a series 65 so as not to be hit with offering securites advice without a registration. What I don't get is how can I be offering advice when all I'm doing is opening the prospectus and showing them what is written inside of it....Yes I know as a registered Rep we provided the prospectus and I know most clients never open them....One of my VA carriers took it a step further and started shipping a CD only version of the prospectus.

To you guys with a series 65 can I just pass the Series 65 anf pay the fee every year and be covered or do I also need to open a RIA or affilita with a RIA. Note I only want to have it to cover me from source of funds issues.

Another interesting point, I sold a bunch of securities accounts that I had to leave behind when I left an agency and my clients haven't been serviced by my successor and my clients have been calling me asking me questions. Its funny how I have to tell them that my current licenses don't allow me to offer advice...It just seems weird that you dropped your registration and you can't even answer questions on a product you sold.

 

[padthaiforlunch]

If this is going to be the trend, getting your S65 license and forming your own RIA is definitely the way to go. Being an RIA that doesn't manage any money is super easy and costs next to nothing.

You'd basically be organized as one of those fee-only financial planners that charges by the hour. You don't have discretion. You don't have custody. In fact, you have $0 AUM. Your ADV would be a cake walk.

If anyone has questions on forming an RIA, feel free to post them here or PM me. I'm happy to help (and if I can't, I can put you in touch with someone that can).

I like this. Makes compliance easy.