U.S. Senator Elizabeth Warren has a new target: the biggest sellers of annuities and the diamond-encrusted rings, iPads, stock options and cruises she says they’re using to entice brokers to sell their investments.
Last time the “powers that be” in there many forms went after the annuity business in a really big way was the attempt at passing 151 which would have changed EIA products to Securities. For advisors that haven’t been around that long the fight came and went and “We Won” is in the mind as the final outcome. Great thing about the peace and tranquility of being naive. Other advisors are now watching Source of Funds as the next battle ground but thinking all the constant inability around deciding on what fiduciary standard means is going to cripple the assault.
For the seasoned advisor its all about using radar and seeing the horizon beyond the clouds or at a greater distance than the human eye can see. If yours is working then a use it care about it and then this news better be on it!
Warren was quoted as writing,“I am concerned that these incentives present a conflict of interest for agents and financial advisors that could result in these agents providing inadequate advice about annuities to investors and selling products that may not meet the retirement investment needs of their buyers,” in the letters, which were slated to go to companies including Prudential Plc’s Jackson National Life, American International Group Inc. and Lincoln National Corp.
In the letters, Warren said car leases, National Football League Super Bowl-style rings and other perks are widely known in the industry and appear to be “kickbacks directed at annuity agents and brokers.” Warren’s office is asking the companies to provide by May 11 a list of all incentives offered to middlemen.
It isnt the only time or the last time the insurance lost a profit center fight , the medicare supplement market was attacked and the same fight was used to change the commissions to a set standard was well as the products themselves. This is the budding of the same fight. If they cant get the fiduciary standard agreed upon quick enough they can while they are working on it, make it impossible to want to sell an annuity unless your a IAR and its part of a non commission platform.
Hope your working on becoming an active IAR at a minimum and you keep your radar on!
The Tax “What if” Doctor;-)