They also don't understand the haircut that you take from your B/D on the commission when you run it through the grid.
SEC says FIA's are securities!!
- Thread starter indaville
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They also don't understand the haircut that you take from your B/D on the commission when you run it through the grid.
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Federal court decisions force these to be securities. The SEC put them outside the safe harbor over 20 years ago. They just took their time bringing the hammer down.
You make a leap here that isn't obvious. Why does having these listed as securities (or more specifically, require some suitability testing) spell the death for FIA's?
No consumers were harmed in the making of this posting.
Dan
Dan,
The difference between VUL's, VA's and FIA's is the fact that on VUL's and VA's, the consumer bears the investment risk. Not so with FIA's. Additionally, with VUL's and VA's, the consumer is investing in equities. Not so with FIA's.
This has been said before, it's nothing more than the securities industry crying foul because billions of dollars are leaving securities every year to go to FIA's. They are tired of losing money. Having a securities license (which I have) does not mean that there won't be crooks out there selling FIA's. Just more red tape to sell them. And I don't sell that much of them. I just hate the fact that the government feels the need for more intrusion.
You make a leap here that isn't obvious. Why does having these listed as securities (or more specifically, require some suitability testing) spell the death for FIA's?
No consumers were harmed in the making of this posting.
Dan
Because of the licensing that will follow. I don't know if you ever had a series 6 and a B/D relationship but I can tell you they are anti-competitve. They will try to shut down your sales efforts. You have to run everything through their goons. Plus they will take a cut of the commission that they don't deserve to have.
In a nutshell, you will have very few insurance agents selling these fantastic products. If no one is selling them then no company will manufacture them. If nobody is manufacturing them then consumers have one less option for long-term savings.
Do you think registering FIAs will fix the problems in the industry? Everyone of the contracts I have sold has been through my insurance commissioner's office. I've not heard of many complaints in my state. If my commissioner thinks and insurance agent is causing problems that agent will be dealt with. I can't say the same for FINRA.
Do you expect FINRA to tell you what is a good life insurance product as well? How about car insurance, should FINRA be able to regulate that as well? I'm sure there unethical agents selling el-cheapo car insurance that when a serious wreck occurs the company writes a check for $25,000 and is done with it?
Where does it stop? Is UL next? CDs? Savings accounts? Whole life?
I was a Series 7 person for fifteen years and haven't lost a nights sleep after deciding to go 100% insurance (giving up 7 license).
I will lose sleep thinking, If I want to sell an FIA, about all the crap involved with the BD thing, more license fees and more E&O costs.
Sometimes the government and all its wonks make me feel like the rat in the maze. Constantly lost in a maze of BS.
Did the SEC stop the wall street gang from bundling / selling mortgages and creating a mortgage crisis? No. Did the SEC stop the wall street gang from dumping securities and creating a $trillion of open interest long positions in commodities? No. Hey ya like that $4 gas that the speculators have brought ya? Did the SEC stop the junk bond problem of the 80's? no. How about the people that lost $billions in the Dot Com bubble?
It is all about power and wall street is not at all happy about not having the FIA business all to themselves. Wall street has never been happy abuot independent BD's either and have made it their business to try to stamp ou independend BD's.
All that I can say is.....oh crap!!!!
I will lose sleep thinking, If I want to sell an FIA, about all the crap involved with the BD thing, more license fees and more E&O costs.
Sometimes the government and all its wonks make me feel like the rat in the maze. Constantly lost in a maze of BS.
Did the SEC stop the wall street gang from bundling / selling mortgages and creating a mortgage crisis? No. Did the SEC stop the wall street gang from dumping securities and creating a $trillion of open interest long positions in commodities? No. Hey ya like that $4 gas that the speculators have brought ya? Did the SEC stop the junk bond problem of the 80's? no. How about the people that lost $billions in the Dot Com bubble?
It is all about power and wall street is not at all happy about not having the FIA business all to themselves. Wall street has never been happy abuot independent BD's either and have made it their business to try to stamp ou independend BD's.
All that I can say is.....oh crap!!!!
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Therefore I could make a case that an FIA paying a fixed interest rate should be registered. After all, the insurance company must invest in something to make that return.
If a traditional fixed return is not a registered product then it would be easy for the insurance company to sell an FIA based on the S&P, you just won't have any return options to choose from on each contract.
So contract A...........your fixed return will vary each year but is based on what the insurance company makes in the annual S&P
Contract B your fixed return will vary each year but is based on what the insurance company makes each month in S&P.
You need to consider that the traditional interest rate you get on an annuity needs to come from someplace. Is part of that interest from T-bills to bonds that the insurance company buys? If so...those are securities.
The only logical conclusion is not that the SEC has no problem with what or how an insurance makes money to pay on a FIA. It is that the big BD's that have a problem with the FIA's. They are losing money.
The entire securities market is about power. The State SEC people don't trust the Federal SEC people, etc. When I was a State registered RIA, my State SEC contact was always worried that the Feds were going to take away the jobs of State SEC people.
Until you understand the constant power struggle that goes on in the securities industry you will never understand those that have a healthy disdain for SEC registration. Another problem is that too many fingers in your pie make you work for slave wage commissions.
Are you ready to give 50% of your commission to some BD that is located 2,500 miles away form you? A BD that doesn't spend a dime of their money to market for you? Are you ready to not be allowed to hold a direct contract with an insurance company outside of your BD? Are you ready to only sell the FIA's that your BD has contracted to sell?
If a traditional fixed return is not a registered product then it would be easy for the insurance company to sell an FIA based on the S&P, you just won't have any return options to choose from on each contract.
So contract A...........your fixed return will vary each year but is based on what the insurance company makes in the annual S&P
Contract B your fixed return will vary each year but is based on what the insurance company makes each month in S&P.
You need to consider that the traditional interest rate you get on an annuity needs to come from someplace. Is part of that interest from T-bills to bonds that the insurance company buys? If so...those are securities.
The only logical conclusion is not that the SEC has no problem with what or how an insurance makes money to pay on a FIA. It is that the big BD's that have a problem with the FIA's. They are losing money.
The entire securities market is about power. The State SEC people don't trust the Federal SEC people, etc. When I was a State registered RIA, my State SEC contact was always worried that the Feds were going to take away the jobs of State SEC people.
Until you understand the constant power struggle that goes on in the securities industry you will never understand those that have a healthy disdain for SEC registration. Another problem is that too many fingers in your pie make you work for slave wage commissions.
Are you ready to give 50% of your commission to some BD that is located 2,500 miles away form you? A BD that doesn't spend a dime of their money to market for you? Are you ready to not be allowed to hold a direct contract with an insurance company outside of your BD? Are you ready to only sell the FIA's that your BD has contracted to sell?
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This is absolutely correct! URDRWHO, sman, and bobson all understand what this is about. This is not about protecting senors it is a power grab by the SEC and FINRA. Protecting seniors is the justification. It is not in anyone's interest other than the SEC, FINRA, and B/D that FIAs be regulated as securities. It will drive the cost of doing business up for the agent and the insurance company. If the none RR agents on this site understood what was involved they would all be up in arms. This reminds me of the following:
"In Germany, they came first for the Communists, And I didn't speak up because I wasn't a Communist;
And then they came for the trade unionists, And I didn't speak up because I wasn't a trade unionist; And then they came for the Jews, And I didn't speak up because I wasn't a Jew; And then . . . they came for me . . . And by that time there was no one left to speak up." FINRA would love to regulate all insurance and investments and no insurance agent should ever want that to occur.
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Suck!!!!
Time to call our FMO's and demand they coordinate an effort to fight this.
Time to call our FMO's and demand they coordinate an effort to fight this.
