The Baby Boomer Dilemma Movie

[DHK]

A guy in my office suites about 4 years ago spent about 50 large yes 50k on Hegna and made about 18k in commission.

Hegna doesn't do the end-game selling, so something was amiss between hiring Tom to speak and the meetings held with prospects. Considering the thousands of presentations that Tom Hegna has given... it's not like that guy didn't know what he was getting or the 7-step retirement planning process that Tom promotes.

I met Hegna and he came across like an obese blowhard know it all.

Many top of the table agents sound that way. Many call it arrogance. Others call it confidence. I guess it depends on if you like the person and their message... or not.

 

[DHK]

Of course as an agent you would be using non-compliant leads that could wind you up in court or with an E&O claim... or just get your license suspended.

I'm slightly confused.

Do you mean leads gathered due to non-compliant statements made in order to secure their information? And, by extension, you're saying that since you paid for the service and didn't correct the info, that you're responsible for the advertisement that secured their info?

Otherwise, I don't know what a "non-compliant lead" is.

 

[DHK]

Agree, that is why I was saying it is a bit extreme if the head of NAIC said on the video that the Guaranty association is a fund & that it is "basically the same as FDIC"

Yeah, that's licensing 101 to never equate insurance or the guarantee association to FDIC.

This file from the VSA and perhaps referencing the ACLI.com (American Council of Life Insurers) site is the only compliant way I would handle the question regarding insurer insolvency.

 

[scagnt83]

I'm slightly confused.

Do you mean leads gathered due to non-compliant statements made in order to secure their information? And, by extension, you're saying that since you paid for the service and didn't correct the info, that you're responsible for the advertisement that secured their info?

Otherwise, I don't know what a "non-compliant lead" is.

As an agent, you are responsible for any marketing that is made upon your behalf. Bought leads are legally considered marketing on your behalf once you purchase them.

A "non-compliant" lead would be one that would not pass regulator scrutiny or carrier scrutiny.

Try telling Athene on the app that you solicited the client by offering an 11% tax free return on a radio ad. I guarantee you the case wont pass suitability.

When you solicit insurance business based on advertising that violates State Insurance Regs, SEC Regs, Ins Carrier Regs, etc. , even if you were unaware of the inaccuracies, you are liable for it from a legal and regulatory standpoint.

Case law has already decided that bought leads from a pre-existing ad campaign, is considered marketing on your behalf. The ones that create a new campaign just for you (Kitchens used to do this) are even more clear cut to be on your behalf.

Even if you dont personally make any inaccurate statements to the client. If the marketing team you hired to provide you your insurance prospects makes inaccurate or illegal statements, you are on the hook for it.

That means you better know exactly what the ads say and promise before you spend thousands on annuity leads.

And if you are an IAR working under an RIA and are putting part of their funds into your AUM... its an even bigger potential issue. Even if the ads just talk insurance, if there is a consistent pattern of moving assets into AUM from the insurance marketing prospects... then once the pattern is established the insurance marketing is considered Advisory Marketing as well. Which would need to be approved by the RIA... and Kitchen's ads would certainly not be approved by compliance.

 

[DHK]

Try telling Athene on the app that you solicited the client by offering an 11% tax free return on a radio ad. I guarantee you the case wont pass suitability.

I guarantee that Athene doesn't ask - only if it's controlled business.

Everything else, yes, I agree. I remember that case out of Maryland (there's a post around here somewhere about it).

 

[scagnt83]

I guarantee that Athene doesn't ask - only if it's controlled business.

Everything else, yes, I agree. I remember that case out of Maryland (there's a post around here somewhere about it).

I guarantee that they do ask. They dont ask you to explain how you acquired the client.... but by signing you are acknowledging you abided by all of Athenes rules and procedures.... including their Marketing Rules; which would prohibit any type of advertisement like the ones I have seen Kitchens do

 

[DHK]

I guarantee that they do ask. They dont ask you to explain how you acquired the client.... but by signing you are acknowledging you abided by all of Athenes rules and procedures.... including their Marketing Rules; which would prohibit any type of advertisement like the ones I have seen Kitchens do

Yeah... well here's Athene's "Advertising Terms to Avoid".

For advertising and putting things in writing, yes, generally some of these terms and phrases are best avoided.

However, my job is to communicate features and benefits as well as terms and conditions.

For my blog, I leave company names out and I communicate the concepts. However, I don't promise any %'s, quote any rates, and careful with my language to be specific about anything that is guaranteed. I'm usually talking in generalities rather than product or company specifics, so if I keep those concepts, I'm good.

Unless I'm writing a product description that requires their compliance approval, I believe I'm set. (I'm certainly not guaranteeing 11% on fixed insurance products as how they perform; likewise, I'm not on the radio promising 12% returns on mutual funds either. It's annoying that the non-licensed entertainers and authors can do whatever they want... but we can't. I digress.)

But these guidelines are written by attorneys who are looking out for the company, and by extension, the agent (more or less). They don't care whether the agent makes a sale. They do care about agent misrepresentation and potential exposure to lawsuits as a result.

 

[DHK]

Regarding agent signatures on each application:

"By signing below, I certify I have truly and accurately recorded on this application the information provided by the applicant. I certify that only company approved sales materials were used and that copies of such materials were 1) left with the client and 2) retained in my files. I certify any required disclosure material has been presented to the applicant.
I have not made any statements which differ from this material nor have I made any promises about the future expected values of this Contract."

You may differ from me in this interpretation. Your interpretation is far stricter than mine.

However:
- Only company approved sales materials were used... once I'm discussing the product particulars, yes. However, I often illustrate the product within a planning context and I use Word and Excel to create those plans. The illustration supports it and I can point to a source in the illustration for every number I use.

But it's not like I take out Athene literature every single time to discuss the concept. I'll use a writing pad and pen first (which is also saved and documented to the client file).

- I certainly won't make any statements that differ from the material (making misrepresentations) nor made any promises about the future expected values of the contract. The illustration, of course, gives a potential outcome, but certainly not guaranteed to happen.

To me, this doesn't appear to apply to advertising - unless (of course) the advertising is promising a rate of return or other non-guaranteed performance result because that would fall under the last line regarding making any promises of future expected values.

 

[scagnt83]

Yeah... well here's Athene's "Advertising Terms to Avoid".

For advertising and putting things in writing, yes, generally some of these terms and phrases are best avoided.

However, my job is to communicate features and benefits as well as terms and conditions.

For my blog, I leave company names out and I communicate the concepts. However, I don't promise any %'s, quote any rates, and careful with my language to be specific about anything that is guaranteed. I'm usually talking in generalities rather than product or company specifics, so if I keep those concepts, I'm good.

Unless I'm writing a product description that requires their compliance approval, I believe I'm set. (I'm certainly not guaranteeing 11% on fixed insurance products as how they perform; likewise, I'm not on the radio promising 12% returns on mutual funds either. It's annoying that the non-licensed entertainers and authors can do whatever they want... but we can't. I digress.)

But these guidelines are written by attorneys who are looking out for the company, and by extension, the agent (more or less). They don't care whether the agent makes a sale. They do care about agent misrepresentation and potential exposure to lawsuits as a result.

Regarding agent signatures on each application:

"By signing below, I certify I have truly and accurately recorded on this application the information provided by the applicant. I certify that only company approved sales materials were used and that copies of such materials were 1) left with the client and 2) retained in my files. I certify any required disclosure material has been presented to the applicant.
I have not made any statements which differ from this material nor have I made any promises about the future expected values of this Contract."

You may differ from me in this interpretation. Your interpretation is far stricter than mine.

However:
- Only company approved sales materials were used... once I'm discussing the product particulars, yes. However, I often illustrate the product within a planning context and I use Word and Excel to create those plans. The illustration supports it and I can point to a source in the illustration for every number I use.

But it's not like I take out Athene literature every single time to discuss the concept. I'll use a writing pad and pen first (which is also saved and documented to the client file).

- I certainly won't make any statements that differ from the material (making misrepresentations) nor made any promises about the future expected values of the contract. The illustration, of course, gives a potential outcome, but certainly not guaranteed to happen.

To me, this doesn't appear to apply to advertising - unless (of course) the advertising is promising a rate of return or other non-guaranteed performance result because that would fall under the last line regarding making any promises of future expected values.

I never said you personally tell clients they will get an 11% ror.

I said the ads Brett Kitchens runs to get leads say that... among other things.

And if an agent buys those leads... legally, they are telling the client that in their initial introduction (the ad is the intro). Even though they personally dont say it, the marketing company is saying it on their behalf.

Your ads legally speak on your behalf. Even paid ads that you had zero input in at all.

It doesnt matter what you do or dont say to the client yourself. We are talking about what the marketing agency YOU HIRED to find YOUR CLIENTS, has said upon your behalf.

----

Your agent contract with Athene specifically says that by signing the app, you agree the sale fits their rules and regulations.

And Athenes marketing rules and regs are more than just the list of prohibited terms.

But even just going by the list of prohibited terms, leads from Kitchens would be prohibited for an agent to use to solicit Athene annuities.

And Athene does not have to be mentioned by name in the ad for it to be considered an ad for Athene annuities. What matters is the flow of business.

 

[scagnt83]

And if you really read Athenes full marketing guidelines.

You would need to get any ads for leads that COULD POSSIBLY result in sales of an Athene annuity, approved by Athene prior to them running.

Now we all know 99% of agents dont do this. But it does show the scope of what you agreed to in the agent contract... and how much reach they could choose to enforce if a complaint was ever made... or if there was a complaint against your marketing company (Kitchens is a ticking time bomb for litigation).

Bottom line, if your marketing ad said it... legally... you said it.

And if it doesnt abide by Athenes rules and regs... they will terminate your contract if they find out.