July 14, 2008
I believe this ruling to be nothing but applied control by the SEC FINRA over a successfully selling, safe, market influenced product that has not been over sold, but has outclassed most Securities based products. The client prefers this product especially during down turns of the market. It is certainly not the answer to ones entire retirement portfolio. It offers an opportunity for safe money growth during good and bad economic times.
Much like the control exhibited by the mofia over the smaller guy, I believe the success of this product has caused nothing but professional jealosy and concern for the fear of lost investor dollars being replaced due to lack of Investor confidence in security products. If you want your clients to stay with securities then build a better product don't eliminate the competitor.
We have to remember that history taught us lessons about the securities markets. When the stock market crashed in 1929 the only companies that stood the test were Insurance Companies. If it hadn't been for that then no securities based products or companies would have ever gotten there start.
Fixed products have there place and it should not be comingled with securities products. It would be a huge disservice to the client to allow this ruling to take place.
Lets think about what is good about what we have with FIA's. We have the Insurance company willing to take on the risk of the investment or option purchases and then passing on 80% of the gain to the client. We have guarantees on the contract period so that client can have minimal returns.Not to mention riders for LTC and other client requested benefits.
Having FIA's as a part of one's investment portfolio is allowing people to have choice and safe money options. It should really be up to the consumer to choose which product to buy based on correct information being offered. We have seen some much success with the sales of FIA products because consumers like the feature and benefits. There enough consumer protection mechanism's on these products such as the suitability forms and suitability boards at the insurance companies. My clients have never been more informed about this product, almost to the point of overboard.
Controlling the FIA's market through broker dealers will distroy a great opportunity for the consumer and strangle profits to agency's, not create opportunities.I think improving the product and protecting the consumer with better agent training as well as innovations to the product does more for the representation of the product than changing the jurisdiction.
Thank You for reading.