Breaking news: SEC approves Ruling 151A
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[quote=IndyJosh]Deekay - Not saying you’re wrong - But I have a feeling that although one doesn’t necessarily HAVE to “wax poetic” about market fluctuations to pitch an EIA - I guarantee you 99% of people selling them DO (especially right now).
Really? How many presentations on EIAs have you been witness to? Does a rep really have to educate a client as to what the market's been doing recently? Unless they've been living in a hole in the ground, they know the market's been crappy. Many of them want the pain to go away.Not mentioning the 40%ish loss in equities in 2008 while selling a product guaranteed to not LOSE any money is like a lawyer withholding the best piece of evidence when trying to prove his case. Yeah they COULD do it, but they're probably not gonna.... You CANNOT lose money in an EIA if you hold it past the full surrender period. Regardless of what the market does over that same time frame. A piece of advice: I would not pursue production if you can't get this fundamental down. I mean, between this misstep and the fact you refuse to prospect tells me you have ZERO chance of making it as a producer.
That being said, I think that there's some truth to what Borker said about State Insurance Boards being kind of a joke. Some are fine, some are terrible, there's just no consistency. More than anything, I think the problem stems from insurance being state regulated while securities are federally regulated. If, hypothetically, there was a federal insurance regulating agency of some sort, EIA's wouldn't need to fall under the SEC, IMO. Right, because the SEC has done such a bang-up job so far.
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tomato, to-ma-toh. Fact is, you've already proven yourself to be clueless as to how this stuff really works. Deal with it.Apprentice, dick.
And unlike Josh, I am saying you're wrong.Deekay - Not saying you’re wrong - But I have a feeling that although one doesn’t necessarily HAVE to “wax poetic” about market fluctuations to pitch an EIA - I guarantee you 99% of people selling them DO (especially right now).
Not mentioning the 40%ish loss in equities in 2008 while selling a product guaranteed to not LOSE any money is like a lawyer withholding the best piece of evidence when trying to prove his case. Yeah they COULD do it, but they’re probably not gonna…
That being said, I think that there’s some truth to what Borker said about State Insurance Boards being kind of a joke. Some are fine, some are terrible, there’s just no consistency. More than anything, I think the problem stems from insurance being state regulated while securities are federally regulated. If, hypothetically, there was a federal insurance regulating agency of some sort, EIA’s wouldn’t need to fall under the SEC, IMO.
And unlike Josh, I am saying you're wrong.[/quote] Prove it. Don't worry - take your time. I've got lots of it.[quote=IndyJosh]Deekay - Not saying you’re wrong - But I have a feeling that although one doesn’t necessarily HAVE to “wax poetic” about market fluctuations to pitch an EIA - I guarantee you 99% of people selling them DO (especially right now).
Not mentioning the 40%ish loss in equities in 2008 while selling a product guaranteed to not LOSE any money is like a lawyer withholding the best piece of evidence when trying to prove his case. Yeah they COULD do it, but they’re probably not gonna…
That being said, I think that there’s some truth to what Borker said about State Insurance Boards being kind of a joke. Some are fine, some are terrible, there’s just no consistency. More than anything, I think the problem stems from insurance being state regulated while securities are federally regulated. If, hypothetically, there was a federal insurance regulating agency of some sort, EIA’s wouldn’t need to fall under the SEC, IMO.
[quote=deekay][quote=IndyJosh]
Really? How many presentations on EIAs have you been witness to? Does a rep really have to educate a client as to what the market’s been doing recently? Unless they’ve been living in a hole in the ground, they know the market’s been crappy. Many of them want the pain to go away.I’ve witnessed enough to know how the case is made for EIA’s in seminar. You telling me there’s nothing to be said to a client to promote EIA’s past “psst, the market’s down 40%.” Man, how do those guys stay in business the other 99% of the time that the markets didn’t just tank?.. You CANNOT lose money in an EIA if you hold it past the full surrender period. Regardless of what the market does over that same time frame. A piece of advice: I would not pursue production if you can't get this fundamental down. I mean, between this misstep and the fact you refuse to prospect tells me you have ZERO chance of making it as a producer.
I have ZERO concern about your speculations on my career.
Right, because the SEC has done such a bang-up job so far.
Read again, I said nothing about the SEC doing a flawless job - I simply said they're consistent across all states. I think that lack of consistency is a legitimate problem with insurance regulation, one which probably necessitated 151a. No?
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I'm sorry, but THATS FUNNY!!!! I think whoever mentioned state vs federal regulation really hit the nail on the head. [/quote][quote=deekay]Aren’t you a secretary?
The secretary hit the nail on the head.
The problem lies in a lack of education - of clients, advisors, and even regulators. You talk about “consistency” of regulation. What good is consistency if thr regulation is corrupt, short-sighted, and ineffective? But hey, as long as the crap-pattie has a consistent texture, it’s all good. Right?
Ice hit the nail on the head - investment reps feel threatened by EIAs. If their BDs allowed them to sell them or encouraged the sale of them, none of this conversation would be happening. Because the fact is, there is nothing inherently bad about EIAs. There can be a problem with how they’re sold. But because the magins to wirehouses are so slim on EIAs, they’re outlawed.
I find it somewhat strange that some of your guys’ BD’s don’t allow index annuities. My BD has their advisors list all non-variable insurance as outside business activity on our U-4.
This means, I can go out and find my own general agent for life insurance and go directly to the insurance companies for fixed and index annuity business. None of this passes through the BD, so I don't take any haircuts along the way.Last BD I worked for encouraged EIA’s as long as it wasn’t the craptastic Allianz Masterdex stuff. Dunno if this is the norm, but as a BD they treated EIAs as securities, and forced them through the grid.
Deekay, Yeah, just like most things, it ultimately boils down to an issue of $$$, more than consistency of regulation.
That being said, I think a lot of reps that’ve sold a VA in a non-resident state know that insurance being regulated on the state level is an outdated, sloppy method. How hard was it to get a non-res securities license added in that state? How hard was it to get a non-res insurance license?
Yeah, we all know how “slim the margins” are on 8, 9 10+% commission products. What wirehouse would want to touch that type of “slim margin”? Let’s see, 45% payout on a 3% commission Fixed Annuity - Great! 45% payout on 6-7% commission Variable annuity - Even Better! 45% payout on a 10% commission EIA - No way! That’s way too “slim”! LOL!!!
[quote=IndyJosh]Last BD I worked for encouraged EIA’s as long as it wasn’t the craptastic Allianz Masterdex stuff. Dunno if this is the norm, but as a BD they treated EIAs as securities, and forced them through the grid.
As a rep, it's hard to get excited for a commission that will get haircut. Case in point - I just placed a $60k fixed annuity for a client. My net payout is $1800. Compare that to a wirehouse. Gross payout is the same $1800, but after the grid at 50% (which is overly generous) it's $900. Compare that to an A share for the same client, $2400 commission, $1200 net payout. And people complain about greedy insurance salesmen....Deekay, Yeah, just like most things, it ultimately boils down to an issue of $$$, more than consistency of regulation. Aha! The truth comes out! There's little money to be had for the wirehouses in selling EIAs, so they shut it down. Now we're getting somewhere.
That being said, I think a lot of reps that've sold a VA in a non-resident state know that insurance being regulated on the state level is an outdated, sloppy method. How hard was it to get a non-res securities license added in that state? How hard was it to get a non-res insurance license? Straw man. Who said anything about easy of licensure? I can get licensed in each state pretty easily if I needed to. I'm licensed for insurance in several states. If a rep knows where to go, they can get it done pretty easily too. I like the idea of having state insurance commissions. I'm pretty fucking tired of centralized everything. I don't need big brother looking over my shoulder every second of every day.
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That would require a 10-year CDSC. It's hard to imagine most reps selling that. From what I've heard, the standard is 5-7% CDSC. Usually 1% commission for every 1 year of surrender. But you probably knew that.Yeah, we all know how “slim the margins” are on 8, 9 10+% commission products. What wirehouse would want to touch that type of “slim margin”? Let’s see, 45% payout on a 3% commission Fixed Annuity - Great! 45% payout on 6-7% commission Variable annuity - Even Better! 45% payout on a 10% commission EIA - No way! That’s way too “slim”! LOL!!!
Deekay… I dunno if you’re picking apart my posts or just responding… but if I’m coming across as thinking I know everything or what not lemme know and I’ll, well, just stop posting I guess? Mainly because I assuredly have a fraction of the knowledge compared to vets in the industry, a group to which many of you probably belong. That being said, I learn a LOT from reading, and at least attemping to contribute something of value on a board like this… So… yeah.
PS: I’m guessing the states you got insurance licensed easily in weren’t Washington, Oregon, CA or NY, to name a few with month long queues and fingerprinting requirements, etc.
[quote=deekay]Who says you need to speak at all about the market when you sell EIAs? I imagine (if I were able to sell them) my conversation with a prospect would go something like this:
deekay: "Mr./Mrs. Prospect, given your conservative nature, I would suggest a deferred annuity for your IRA rollover. This way, you are guaranteed to not lose money as long as you hold it for the length of the surrender period. We can go one of two ways: a traditional fixed annuity, which pays a set interest rate. Or, we can go with a equity-indexed annuity. It's returns are partially tied to the return of the SP500. The traditional fixed annuity offers a higher minimum rate of return. The equity-indexed annuity offers the potential for a higher rate of return than the traditional fixed annuity. Which is more important to you: a higher minimum, or a higher maximum?" Prospect: "__________________________" deekay: "Great, sign here." The reason so many people are up in arms about not wanting to get a securities license to sell EIAs is because THEY ARE NOT SECURITIES. Spare me the "oh, well, you manage to talk abou the markets, so you must get securities licensed." spin. I proved you don't need to wax poetic about the fluctuations in the market. What I will lobby for is additional training of reps on how these products work. Clients, advisors, and the media would all benefit as a result. The SEC is not going to provide that training, and we know they've shit the bed countless times when trying to "regulate" so what good is it going to be for EIAs to be registered products? [/quote]If this is how your conversation would go, you would probably sell a lot of EIA's.
[quote=IndyJosh]Deekay - Not saying you’re wrong - But I have a feeling that although one doesn’t necessarily HAVE to “wax poetic” about market fluctuations to pitch an EIA - I guarantee you 99% of people selling them DO (especially right now).
Not mentioning the 40%ish loss in equities in 2008 while selling a product guaranteed to not LOSE any money is like a lawyer withholding the best piece of evidence when trying to prove his case. Yeah they COULD do it, but they’re probably not gonna…
That being said, I think that there’s some truth to what Borker said about State Insurance Boards being kind of a joke. Some are fine, some are terrible, there’s just no consistency. More than anything, I think the problem stems from insurance being state regulated while securities are federally regulated. If, hypothetically, there was a federal insurance regulating agency of some sort, EIA’s wouldn’t need to fall under the SEC, IMO.
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You sure do a lot of thinking for a boy named Josh, who holds a girl’s job. Are there any Joshes over 19 years old?
And unlike Josh, I am saying you're wrong.[/quote][quote=IndyJosh]Deekay - Not saying you’re wrong - But I have a feeling that although one doesn’t necessarily HAVE to “wax poetic” about market fluctuations to pitch an EIA - I guarantee you 99% of people selling them DO (especially right now).
Not mentioning the 40%ish loss in equities in 2008 while selling a product guaranteed to not LOSE any money is like a lawyer withholding the best piece of evidence when trying to prove his case. Yeah they COULD do it, but they’re probably not gonna…
That being said, I think that there’s some truth to what Borker said about State Insurance Boards being kind of a joke. Some are fine, some are terrible, there’s just no consistency. More than anything, I think the problem stems from insurance being state regulated while securities are federally regulated. If, hypothetically, there was a federal insurance regulating agency of some sort, EIA’s wouldn’t need to fall under the SEC, IMO.
You are a Jones broker. Enough said.
[quote=Hank Moody] [quote=deekay]Who says you need to speak at all about the market when you sell EIAs? I imagine (if I were able to sell them) my conversation with a prospect would go something like this:
deekay: "Mr./Mrs. Prospect, given your conservative nature, I would suggest a deferred annuity for your IRA rollover. This way, you are guaranteed to not lose money as long as you hold it for the length of the surrender period. We can go one of two ways: a traditional fixed annuity, which pays a set interest rate. Or, we can go with a equity-indexed annuity. It's returns are partially tied to the return of the SP500. The traditional fixed annuity offers a higher minimum rate of return. The equity-indexed annuity offers the potential for a higher rate of return than the traditional fixed annuity. Which is more important to you: a higher minimum, or a higher maximum?" Prospect: "__________________________" deekay: "Great, sign here." The reason so many people are up in arms about not wanting to get a securities license to sell EIAs is because THEY ARE NOT SECURITIES. Spare me the "oh, well, you manage to talk abou the markets, so you must get securities licensed." spin. I proved you don't need to wax poetic about the fluctuations in the market. What I will lobby for is additional training of reps on how these products work. Clients, advisors, and the media would all benefit as a result. The SEC is not going to provide that training, and we know they've shit the bed countless times when trying to "regulate" so what good is it going to be for EIAs to be registered products? [/quote]If this is how your conversation would go, you would probably sell a lot of EIA's.
[/quote] Yes, this is very good and simple. I like it.
[quote=IndyJosh]Last BD I worked for encouraged EIA’s as long as it wasn’t the craptastic Allianz Masterdex stuff. Dunno if this is the norm, but as a BD they treated EIAs as securities, and forced them through the grid.
Deekay, Yeah, just like most things, it ultimately boils down to an issue of $$$, more than consistency of regulation.
That being said, I think a lot of reps that’ve sold a VA in a non-resident state know that insurance being regulated on the state level is an outdated, sloppy method. How hard was it to get a non-res securities license added in that state? How hard was it to get a non-res insurance license?
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Did your old firm encourage the janitors, too, or was it just the secretaries?