Source of funds - Series 65

[DHK]

Just seems safer to be 65 licensed and set up your own RIA or join an RIA, even if you're not going to do any money management for a fee. There are companies that can set up your RIA for you. It's a few thousand, but well worth it.

Be careful with that thinking. In the broker/dealer world, they call that "parking your licenses" and that's illegal.

But calling yourself an investment advisor without doing what investment advisors do (charging fees and/or collecting AUM)... can INCREASE your overall liabilities.

 

[VolAgent]

Be careful with that thinking. In the broker/dealer world, they call that "parking your licenses" and that's illegal.

But calling yourself an investment advisor without doing what investment advisors do (charging fees and/or collecting AUM)... can INCREASE your overall liabilities.

Not only that, but any advisor who only does annuities is just asking for it. There is a world of hurt coming, the only question is when and who from.

 

[DHK]

This is not legal advice, but I would highly suggest that, if and/or when you go down the RIA path, that you still keep the word 'insurance' in your business marketing name. If you present yourself ONLY as DHK Investment Advisors, LLC and you're primarily selling fixed or fixed indexed annuities... you'll have a problem because you're portraying yourself as ONLY presenting fiduciary investment services.

This applies to California, but may be a very good guideline for others:
Exception to Name Approval

(A) An exception to this rule may be made on a case by case basis where the applicant or licensee holds a certificate as a broker/dealer under California Corporations Code Section 25210 and/or where the applicant holds a certificate as an investment adviser under the provisions of California Corporations Code Section 25230 and the applicant has submitted evidence satisfactory to the Commissioner that in excess of 80 percent of the applicant's net income from the said business entity for which name approval is being sought is derived from sources of business other than insurance. The foregoing exception is not available to an agent of a broker-dealer, as the word "agent" is defined in California Corporations Code Section 25003.

So, if you're going to be an RIA, and 80%+ of your business revenue is going to be from RIA activities, then you don't have to put 'Insurance' or other required words in your business entity name. (Variable contracts count as investments.)

Otherwise, I'd make sure that you use the word 'insurance' in your business entity name.

 

[JJ2713]

Be careful with that thinking. In the broker/dealer world, they call that "parking your licenses" and that's illegal.

But calling yourself an investment advisor without doing what investment advisors do (charging fees and/or collecting AUM)... can INCREASE your overall liabilities.

Not only that, but any advisor who only does annuities is just asking for it. There is a world of hurt coming, the only question is when and who from.

65 license is not a securities license. No broker-dealer involved.

The regulators can't force you to advise a client to put $xxx in this and $xxx in that.

Using different words or general language to try to get around not telling someone to sell a security and buy an annuity is also shaky.

The IMOs who have RIAs now... you don't think they know the rules? You don't think they consulted with attorneys to figure out a way to deal with the DOL rule? You think they would be telling their agents to get 65 licensed and join their RIA just in case for no reason?

The main problem with the DOL rule is that there's no suggestion on how to advise. Nor should there be. The DOL rule is not necessary. There is already regulation. And only an unethical agent/advisor would hurt a client.

Fee-only advisors hurt clients every day but only doing money-management and then the client loses 30% during a market crash, or not having guaranteed income, etc.

If you're going to be talking about investments and moving money from securities, you should be 65 licensed. That doesn't mean that you have to do any money management. You can tell any regulator that client is saving money by not paying any fees to you.Or what if you just charge a small fee (like $500/year) and not a % of AUM?

Money management fees are a rip-off anyway. Money-management advisors don't do anything for the client that the client can't do themselves.

Or what if the client doesn't want to invest int he stock market anyway. Nobody in or close to retirement should be exposed to the stock market, at least not without downside protection (options, sell strategies, etc.).

Besides, you're not going to put all of a client's money into annuities anyway. Just what's needed. Many advisors make way more from insurance products than managed money, but they're also 65 licensed and/or securities licensed.

Not arguing with any of you. Just want to be safe and want you to be safe as well from overzealous regulators.

 

[VolAgent]

If you are licensed to give investment advice for a fee, I believe always giving the advice that annuities are the right answer and nothing else is dangerous. I also believe this would be the case regardless of whether you actually charged a fee or not.

Now, if only sell annuities, but your advice also includes recommendations for other products, whether you sell them or not, I believe you would be golden.

 

[DHK]

65 license is not a securities license.

Correction: It's not a BROKER/DEALER license. It's an investment adviser license subject to the investment adviser act of 1940. It is DEFINITELY a securities license.

You are still subject to your state registration and/or SEC registration laws governing RIAs.

The DOL rule is gone. Doesn't exist. Not anymore.


You might want to check out tactical asset management strategies as a risk-based approach to avoiding significant downturns in a portfolio - subject to a risk tolerance assessment and rating. Clients CANNOT do this on their own. They need an institution to do this - even if it's a "robo-advisor" institution.

 

[Stephen]

Money management fees are a rip-off anyway. Money-management advisors don't do anything for the client that the client can't do themselves.

I manage assets for a fee, I also sell insurance products on commision when appropriate. You are dead wrong if you think that I don't earn the fee that my clients choose to pay me.

Sure , there are plenty of people that are perfectly willing and able to select and manage their own mutual funds , choose the appropriate risk based investment allocation, educate themselves about Social Security and Medicare , decide on their own the best way to transfer assets to their heirs , save for college, pay off student loans , find an estate planning attorney , find a CPA , and decide which debt to pay off and which to keep . Those people don't need me or my fee. Those that do need me get everything that I have to give-knowledge and effort- to earn my keep.

So to say that I am a rip off , is bullshit , and very similar to Ken Fisher's statements on annuities.

 

[JJ2713]

I manage assets for a fee, I also sell insurance products on commision when appropriate. You are dead wrong if you think that I don't earn the fee that my clients choose to pay me.

Sure , there are plenty of people that are perfectly willing and able to select and manage their own mutual funds , choose the appropriate risk based investment allocation, educate themselves about Social Security and Medicare , decide on their own the best way to transfer assets to their heirs , save for college, pay off student loans , find an estate planning attorney , find a CPA , and decide which debt to pay off and which to keep . Those people don't need me or my fee. Those that do need me get everything that I have to give-knowledge and effort- to earn my keep.

So to say that I am a rip off , is bullshit , and very similar to Ken Fisher's statements on annuities.

You misinterpreting what I said and jumping to conclusions and getting hostile for no reason.

You can do all of that without charging a % of AUM. Flat fees are more logical.

 

[JJ2713]

If you are licensed to give investment advice for a fee, I believe always giving the advice that annuities are the right answer and nothing else is dangerous. I also believe this would be the case regardless of whether you actually charged a fee or not.

Now, if only sell annuities, but your advice also includes recommendations for other products, whether you sell them or not, I believe you would be golden.

That's my philosophy as well. Cover all bases, whether you earn money from all bases or not.

 

[VolAgent]

I manage assets for a fee, I also sell insurance products on commision when appropriate. You are dead wrong if you think that I don't earn the fee that my clients choose to pay me.

Sure , there are plenty of people that are perfectly willing and able to select and manage their own mutual funds , choose the appropriate risk based investment allocation, educate themselves about Social Security and Medicare , decide on their own the best way to transfer assets to their heirs , save for college, pay off student loans , find an estate planning attorney , find a CPA , and decide which debt to pay off and which to keep . Those people don't need me or my fee. Those that do need me get everything that I have to give-knowledge and effort- to earn my keep.

So to say that I am a rip off , is bullshit , and very similar to Ken Fisher's statements on annuities.

That is great. I remember talking to a family friend once about using him. He took a list of most of my assets and came up with this portfolio, but never really could explain why that was better than what I was doing or what he was going to do for his fee. So my money still sits with a broker, not in managed money accounts.