Pros and Cons of Securities License. Variable Life, Securities - What are your thoughts?

[Jeremy Masters]

Life Agents can already work with iUL Products and Annuities.

What are your personal pros and cons here? Variable life and general securities vehicles can be sold?

Do you find credibility matters here? The ability to say "I am a financial advisor?"

 

[DHK]

Life Agents can already work with iUL Products and Annuities.

What are your personal pros and cons here? Variable life and general securities vehicles can be sold?

Do you find credibility matters here? The ability to say "I am a financial advisor?"

Overrated. The ability to solve problems is far greater than your title or products you sell.

Securities licensing (specifically broker/dealer securities licenses such as SIE, series 6 & 7) have a lot of restrictions on marketing and other things that can affect the practice you want to build. If you want to manage securities portfolios and give investment advice, I'd go with the RIA and a Series 65 license and forget the rest.

https://www.davidkinderfinancial.co...ncial-planning-and-retirement-portfolio-today

 

[PrivClientSG]

LOL...oh, this is a question that I have long debated with my partner and anyone else who wants to listen. I've long said that a title doesn't dictate your work, a license and you makes that decision. There are people at wirehouses who say they are financial advisors or financial consultants, and they haven't looked at anything other than stocks, bonds, AUM, mutual funds, etc., in years. Some have taken on selling VA's, but they still know nothing about anything else. These people are investment focused. That said, I know captive agents in General Agencies, who are securities licensed, and they too hold themselves out as FA's and FC's -- and they sell AUM, mutual funds, sometimes some stocks and bonds, and VA's. However, these people are insurance focused, and their knowledge about the investment world is going to be limited, not a focal point, etc.

Credibility is not exclusive to a license, a designation, or the like. It may be part of it, and even at that, it's may be. On the investment side, you can go with the B-D model, or you can go with the RIA side of the business. Regardless, when looked at in the context of life insurance (and other types of insurance, disability, health, LTC) -- you have to decide what you want to do. I know top producers who do both and they are top producers on both sides. However, their expertise is on one side. They rely on an expert for the other side. I do the same thing and I have for many years. Good luck to you!

 

[PrivClientSG]

Just as a follow up -- the debate I have with my partner was the B-D route vs. the RIA route. After many years in the business and achieving a high level of success, income, etc. -- having a B-D became restrictive based upon what our business had become. B-D's back then were not in the wealth management business and could not, and would not support it. We could not get any support for the marketplace we were in, the work we were wanting to do, and the services we wanted to provide to our clients -- especially in the money management/AUM arena.

Today the B-D's are more in the wealth management business, to some extent, and they can be somewhat more supportive in some areas, but I still think it has its limitations, again, especially the money management/AUM arena. I just see the B-D being more restrictive and not as competitive, at least compared to the RIA model. I do think the RIA model is far more entrepreneurial, and far more flexible. A friend of mine left a B-D, joined with a few partners who had a similar vision, and they built their own RIA. Less than 15 years later they just sold (a portion) to Hightower (who has been on a buying spree, LOL).

My partner and I got very lucky that we were able to find a B-D that would allow us to maintain a (grandfathered) relationship with an outside, independent RIA, as well as build our own RIA.

 

[billyb]

I got my Series 6 about 20 years ago and I sold a lot of variable annuities. Saw a client and his wife about a year after I sold him. She was very freindly but he wasn't. She asked him what was wrong. He said I was the guy that lost some of his money. I never sold another VA. I didn't want to be known as the agent that lost an investor's money.

Had several clients that I sold back then approach me lately and thank me for helping them. Said they made a fortune in the Park Avenue Fund. At least now I know that in the long run most of my clients made money.

 

[DHK]

I'll just add that indexed contracts (IUL and FIA) are relatively new in the grand scheme of things. Before these existed, you really did need securities licenses if you wanted to "do it all." Plus, 15-20 years ago, these contracts weren't as good and consumer friendly as they are today.

I believe most producers that have securities licenses are either taught and "brought up" that way and haven't really changed gears... or they may still be 'brainwashed' that indexed contracts aren't as good for the consumer (still). Some companies still parrot that to their reps (even though these same companies also sell variable life and variable annuities).

 

[Lloyds of Lubbock]

"The Park Avenue Fund"
Back in the day Chuck Albers managed that fund it had solid performance.
He was a good guy, ate in the cafeteria with everyone else and was approachable to answer a question.
When he left Guardian for Mass Mutual the fund never regained its luster.

 

[Lloyds of Lubbock]

" Your commitment to excellence will define your career"
This quote is attributed to Vince Lombardi.
You are selling Life Insurance and I assume you have a good knowledge of what you are selling.
You can sell LTC, DI (group and individual), health etc.
In the life area you have sales based on family protection, wealth accumulation, estate protection, retirement, just to name a few.
How many of these areas can you excel in?
FOR MY PRACTICE, I felt it was better to be a specialist and bring in someone who was more knowledgeable in another category.
I gave up my securities license a long time ago and never looked back.
You have to figure out what works for you.
I don't think anybody on this board can give you a definitive answer.
One thing I can tell you is that you will have a lot less compliance issues without a security license.

 

[walthamny]

If you build an AUM business of 20 Million to 50 Million assetts and sell it at retirement you will get somewhere around 1 million dollars. The price I post is an estimate, it will depend on the age distribution of your client base. You will get peanuts at the Broker dealer world for retirement. So long term compensation matters. As for the support at BD world, it is increasing because they want to stop the flow of AUM business to the independent RIA world. Also while at the beginning its okay for an advisor to sell American funds with A shares, its hard to make a living just on A shares, you have to mix it with Variable annuities. On the hand, if you go the RIA way from the beginning, you can open as low as 5K IRA accounts and in the mean time sell 25K FIA each week and survive the beginning years.

 

[PrivClientSG]

I got my Series 6 about 20 years ago and I sold a lot of variable annuities. Saw a client and his wife about a year after I sold him. She was very freindly but he wasn't. She asked him what was wrong. He said I was the guy that lost some of his money. I never sold another VA. I didn't want to be known as the agent that lost an investor's money.

Had several clients that I sold back then approach me lately and thank me for helping them. Said they made a fortune in the Park Avenue Fund. At least now I know that in the long run most of my clients made money.

If you're interested and would like some interesting education, go google "Chuck Albers" -- he ran the Park Avenue Fund (a Guardian Life Insurance Company fund) from 1972 to 1998. Chuck was a CFA, had a degree in Economics (I forgot from where), and an MBA (Columbia).

Chuck had an incredible track record and run for Guardian with the Park Avenue Fund. He had some proprietary methodology, software, something, LOL, which helped him identify and select stocks. Whatever it was, or even if it didn't exist at all, LOL, whatever he was doing worked!!! Depending on who you talk to, somewhere around 1997 or 1998, Chuck approached Guardian and said that he wanted to work X number of more years (about 5 or so), and he wanted some sort of equity participation in the fund. Obviously it couldn't be in the company as Guardian was a mutual company. Guardian's story was that he wanted a crazy percentage, they offered him a very generous deal, etc., and he left.

Personally, I believe Chuck's story, and I'll explain why later. Regardless, while he had been heavily recruited in the past, he was approached by Oppenheimer (Oppenheimer Funds, who was owned by Mass Mutual at the time), who allegedly offered him equity participation, and he took the job where he was managing the Oppenheimer Main Street Fund (he took on co-managing another fund, advising on stock selection, etc.). Long after Chuck retired (in 2003) Oppenheimer JV'ed with The Carlyle Group, and in 2019 the company was sold to Invesco.

Chuck retired in 2003. He and his wife Judy relocated from NJ to Sarasota, FL. His wife passed away several years ago. He was very active in the community, and still in retirement he kept up his interests in economics. As of about five years ago or so, I believe he was still the Program Director for the Sarasota Economics Club! LOL. No way could the club ever find anyone better than him! Oh, yeah, that's right...the reason why I believe Chuck's side of the story...is because I know him...truly one of the good guys!