Why I think FINRA is behind it

[gstker]

I have recently started to come across seniors purchasing index linked CD's. To my knowledge theses are not FINRA products, but bank products. Is FINRA making a big deal of these too??

I tell you seniors are not paying attention to theses either. I had a gentlemen show me one that pay between 1 and 15% for 5 years based on a basket of 10 stocks. He thought he was in heaven having a chance to make 15% with no risk. What he failed to figure out was if he took his possible 15% and divided it by the 5 years, his max interest if the index performed was 3% a year.

 

[Freddie]

I have recently started to come across seniors purchasing index linked CD's. To my knowledge theses are not FINRA products, but bank products. Is FINRA making a big deal of these too??

I tell you seniors are not paying attention to theses either. I had a gentlemen show me one that pay between 1 and 15% for 5 years based on a basket of 10 stocks. He thought he was in heaven having a chance to make 15% with no risk. What he failed to figure out was if he took his possible 15% and divided it by the 5 years, his max interest if the index performed was 3% a year.

So the absolute most he could make was 3% a year over 5 years? Unreal. I bet the things have expenses too.

 

[insuranceexec]

So the absolute most he could make was 3% a year over 5 years? Unreal. I bet the things have expenses too.

Not to mention that it is SIMPLE interest that is credited to the account; as opposed to compounded.

That is of course if I am understanding the concept; which is always open to interpretation........LOL

 

[InsureGuy5]

This is nothing more than a power grab by the SEC. If you look at the track record of EIA's over the past decade as compared to the overall markets - anyone in an indexed annuity has done better.

 

[djs]

What if you look at them over the last 3 months? Or the last 30 years?

Just curious

Power grab = Yes
Inappropriate = ?????

 

[JMO Fan]

Saying that 151a is a "power grab" is a common soundbite. But 151a requires reporting to state insurance departments, not the SEC. The track record of the SEC back to 1986 shows that they've always thought indexed products were securities, and said so when they released the original Safe Harbor Rule (Rule 151).

Any news on the lawsuit?

 

[KJ in Miami]

Re: EIA Securities Registration Advantages

Benefit to consumers: More consistent, compliant, & complete disclosure

Benefit to sellers: More consistent documentation of suitability, defense against discontent

Benefit to companies: Clearer compliance requirements, level playing field

Benefit to all: Stronger, suitable sales => better persistency

Benefit to non-EIA buyers: separate account => no diversion from general account to EIAs

Wall Street is not the answer EXCEPT for the FIA's!! What a racket that is... in my opinion. Compliance is not the answer but that is beyond my paygrade!! I do agree with FINRA being the oversight arm of FIA's!!
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I responded to another couple years old thread... oh well!

 

[Icando]

Re: EIA Securities Registration Advantages

Wall Street is not the answer EXCEPT for the FIA's!! What a racket that is... in my opinion. Compliance is not the answer but that is beyond my paygrade!! I do agree with FINRA being the oversight arm of FIA's!!
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I responded to another couple years old thread... oh well!

I'd buy calls that you're a registered rep.

 

[KJ in Miami]

Re: EIA Securities Registration Advantages

I'd buy calls that you're a registered rep.

A what???

 

[DHK]

Re: EIA Securities Registration Advantages

Compliance is not the answer but that is beyond my paygrade!! I do agree with FINRA being the oversight arm of FIA's!!

Yeah, I can tell that compliance people are probably paid more than you.

Compliance is EVERYBODY'S business. That's why you need to THINK before writing or speaking.

Compliance DEPARTMENTS think they need to do the thinking and the advising FOR us. Why? To protect the firm. It has NOTHING to do with "protecting the public". That's just the excuse they give.

And if you haven't figured that out, that's probably why compliance people make more than you do.