Self Regulating the Annuity Industry

[scagnt83]

I read an article recently that I thought was relevant to recent discussions here...

This annuity

The need for


One of the big red flags against Glenn Neasham were his 10% annuity billboards. These were basically marketing just the first year bonus instead of the annualized return.

And we all have heard of someone getting "8% guaranteed" and they think its liquid... when its just an income rider.

Then there are the people who sell 15 year products to those with less than 10 years to live.... we all have seen that recently and not so recently here on the forum. Agents like that are why regulators are stepping in and creating rules such as the 10/10 provision.


But what if we acted like true professionals? What if we called out unscrupulous agents and did not embrace them in the industry?

Engineers are a great example.
They have state ethics boards that can recommend that the state strip that person of their PE (professional engineer) credentials.

It is time that the insurance industry takes a stand against bad apple agents.

Too many of us say "oh well" or dont want to ruffle feathers. Or maybe you think its none of your business.... but when an agent is blurring ethical lines and is not called out for it; it does our industry a huge disservice.

Next time you see or hear an agent blurring those lines, say something. Call them out on their real intentions. Work to get the good name of "insurance agent" back to being a good thing in the publics eyes. That will only happen when good agents start to call out bad ones.

 

[VolAgent]

Something to keep in mind.

Engineers and architects killed more than a few people before they were required to stamp and sign blueprints and their professional boards were formed. It was pretty much the same with doctors and dentists.

I agree with you that appropriate self-regulation is better than external regulation. But for better or for worse, we haven't "killed" enough people yet. Also, self-regulation can often be just as bad if not worse than external regulation, just look at FINRA.

Someone has to lead the movement for reform, are you willing to be that person?

 

[bobson]

That's the problem. Many of us don't believe Mr. Neasham blurred any lines. The state insurance department approved the product as well. I don't for a second question whether Mr. Neasham fully explained this product to his client. I don't for a second believe she showed any signed of dimentia.

 

[VolAgent]

That's the problem. Many of us don't believe Mr. Neasham blurred any lines. The state insurance department approved the product as well. I don't for a second question whether Mr. Neasham fully explained this product to his client. I don't for a second believe she showed any signed of dimentia.

To borrow the engineering comparison, the bridge still collapsed.

 

[scagnt83]

Something to keep in mind.

Engineers and architects killed more than a few people before they were required to stamp and sign blueprints and their professional boards were formed. It was pretty much the same with doctors and dentists.

I agree with you that appropriate self-regulation is better than external regulation. But for better or for worse, we haven't "killed" enough people yet. Also, self-regulation can often be just as bad if not worse than external regulation, just look at FINRA.

Someone has to lead the movement for reform, are you willing to be that person?

LOFnL!!!

I love the first part of that response!! My father is an engineer... I will have to send that to him!


I would not consider FINRA self-regulation. It might be classified as that... might have started as that. But they have morphed into a quasi government entity hell bent on power grabs and fees.

If you compare FINRA to other professional self reg entities it looks like something completely different. How many practicing RRs are there that run FINRA or that are on the board? Its all compliance people with compliance experience... not real life on the ground experience...

To summarize the FINRA CEO's past 30+ years:
- Regulatory Officer
- General Counsel
- NASD President
- SEC (8 years as director of Market Regs)

"Richard Ketchum is Chairman and CEO of FINRA.

Prior to becoming CEO of FINRA, Mr. Ketchum was CEO of NYSE Regulation from March 2006 to March 2009. He served as the first chief regulatory officer of the New York Stock Exchange, a position he began in March 2004. From June 2003 to March 2004, Mr. Ketchum was General Counsel of the Corporate and Investment Bank of Citigroup Inc., and a member of the unit's planning group, Business Practices Committee and Risk Management Committee.

Previously, he spent 12 years at NASD and The Nasdaq Stock Market, Inc., where he served as president of both organizations.

Prior to working at NASD and NASDAQ, Mr. Ketchum was at the Securities and Exchange Commission (SEC) for 14 years, with eight of those years as director of the division of Market Regulation."

This guys job history list NO real on the ground selling/advisory experience.

Do you know what the head of your state engineering ethics board does for a living??? He is a practicing engineer.
Do you know what the head of the national ethics board does for a living??? He is a practicing engineer.


Furthermore, FINRA employees are very well paid. Do you know what you get for being a state engineering ethics board member? A pat on the back! Maybe some free swag from the state engineering society.

Big difference in motives there.... just read this guys biography... Biography - Richard G. Ketchum - FINRA


I realize that our regulatory industry will never look like that of other professions. But if we as agents did more in the areas that we are able to, then that would help to trump the big regulators ability to have so much free reign.

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I don't for a second question whether Mr. Neasham fully explained this product to his client. I don't for a second believe she showed any signed of dimentia.

I agree.

And for the record, while I might not like the product use. Imo what Glenn did was totally legal and all of that never should have happened to him.

That's the problem. Many of us don't believe Mr. Neasham blurred any lines. The state insurance department approved the product as well. .

The FDA has approved catheters to be used in adult males.... if you had a problem taking a piss and the doctor pulled out a catheter would you not ask if there were any other options first??????

Just because it CAN be used sometimes, doesnt mean it SHOULD be used all of the time.

 

[bobson]

To borrow the engineering comparison, the bridge still collapsed.

It only collapsed by force of guns and prisons. It didn't collapse of its own weight. Who else thinks the son really blew it by having the product unwound? He lost out on a lot of money.

 

[scagnt83]

It only collapsed by force of guns and prisons. It didn't collapse of its own weight. Who else thinks the son really blew it by having the product unwound? He lost out on a lot of money.

Its not nature that is the problem. Its nurture. Or in other words, it is human nature, emotion, and a lack of logic that is the problem.

Like I said in another thread. An annuity by itself is harmless. It only does harm by ignorance of an agent or the client.... or both.

 

[VolAgent]

It only collapsed by force of guns and prisons. It didn't collapse of its own weight. Who else thinks the son really blew it by having the product unwound? He lost out on a lot of money.

A bridge that is unable to handle the normal flows of the river it crosses is an unsound bridge.

I'm not saying this to dump on Glenn, but it is reality. In hindsight, there are a lot of things he could have done differently and not have ended up on this situation. All he had to do was either get the son on board or keep the bank from calling. Either one probably would have been sufficient to keep it from getting to the point it did.

 

[CALTCAgent]

It only collapsed by force of guns and prisons. It didn't collapse of its own weight. Who else thinks the son really blew it by having the product unwound? He lost out on a lot of money.

He was never real happy about the original beneficiary.

 

[scagnt83]

Who else thinks the son really blew it by having the product unwound? .

Since he was not the beneficiary of the CD that was liquidated or the Annuity the funds were moved to I would say that he made out very well since he wound up with all of the money.... whatever amount it was...