Probable result of 151A

[indaville]

Any signs of carriers moving index annuities to separate accounts, or requiring variable product licenses? I don't see any news of lawsuits to repeal 151a.

Give it some time. You will probably see a group of them team together for a class action lawsuit. FMO's may do the same thing. NAFA is considering their next step.

Some carriers will probably throw in the towel though.

Matt

 

[BiggitySwat]

IMO it is only about money and who controls it. The brokers want the AUM and control. They may very well invest it in emerging markets and international stocks and funds They don't care, it is about making up for and generating fees and commissions, not what is best, appropriate or suitable for the client.

I had a prospect who was 78 years old, had early stages of dementia, and her Merill Lynch broker (an older man, not a newbie or anything) had her entire nest egg of 250K in a managed account (traditional IRA).

The woman had to take RMDs every year, even in down markets. Her asset allocation? 20% muni bonds (held in an IRA, lmfao), 20% variable annuity (subaccounts into midcap equities) and here's the kicker.....60% into a handful of mutual funds, most of them growth and value into international emerging markets.....

I talked to her daughter about transferring the money to my firm so I can put her into some safer, non-securities options (laddered FIAs and FAs, bank CD, etc). The daughter refused, citing that her mom was with this broker for 8 years and was "very happy."

I asked the daughter if she had any idea what her mom was investing in, and whether or not it was appropriate. She said she had no clue, but nonethless, she was "just not interested."

So yes, I agree, and from experience, alot of these securities nazis are lazy, corrupt, and one-track minded. Almost every single wirehouse broker I meet, and some independents, push C share mutual funds and slap on their 2% wrap fee on every damn client in existence as if high-backend load mutual funds were God's gift to mankind. It's ALL about the AUM and creating dependency on the broker to ride the client's account for years while doing very little work.

 

[xrac]

I love Boomer Market Advisor. It has really good stuff in it:

10 Questions for Susan Voss, Iowa Insurance Commissioner, on the EIA Regulation 151a controversy

Love `em or hate `em, the case for equity-indexed annuities is playing out before our eyes.

 

[Freddie]

I had a prospect who was 78 years old, had early stages of dementia, and her Merill Lynch broker (an older man, not a newbie or anything) had her entire nest egg of 250K in a managed account (traditional IRA).

The woman had to take RMDs every year, even in down markets. Her asset allocation? 20% muni bonds (held in an IRA, lmfao), 20% variable annuity (subaccounts into midcap equities) and here's the kicker.....60% into a handful of mutual funds, most of them growth and value into international emerging markets.....

I talked to her daughter about transferring the money to my firm so I can put her into some safer, non-securities options (laddered FIAs and FAs, bank CD, etc). The daughter refused, citing that her mom was with this broker for 8 years and was "very happy."

I asked the daughter if she had any idea what her mom was investing in, and whether or not it was appropriate. She said she had no clue, but nonethless, she was "just not interested."

So yes, I agree, and from experience, alot of these securities nazis are lazy, corrupt, and one-track minded. Almost every single wirehouse broker I meet, and some independents, push C share mutual funds and slap on their 2% wrap fee on every damn client in existence as if high-backend load mutual funds were God's gift to mankind. It's ALL about the AUM and creating dependency on the broker to ride the client's account for years while doing very little work.

Yup. Pretty tragic. What will be sickening is after these brokers wipe people out, their BDs in the Obama Depression will get wiped out - they will turn up selling EIAs.

The SEC is a joke. People in EIAs in the last 18 months have lost nothing and no I do not drink the insurance company kool-aide but its is hard to argue aginst EIAs right now.