by Insurance Expert » Thu Sep 03, 2009 12:12 pm
Gary, I asked this before inside of a thread, but didn't get a response.
I'm curious. If one does end up needing a security license to sell EIAs, will you become a registered rep or will you stop selling them?
Please don't get into a diatribe about all of the reasons why an EIA should not be regulated as a security. I'm asking you not to do this simply because I am in complete agreement. It's absolutely ludicrous.
I'm curious. If one does end up needing a security license to sell EIAs, will you become a registered rep or will you stop selling them?
Please don't get into a diatribe about all of the reasons why an EIA should not be regulated as a security. I'm asking you not to do this simply because I am in complete agreement. It's absolutely ludicrous.
Posted: Thu Sep 03, 2009 12:22 pm Post Subject:
I know I probably won't.....too much hassle and it's not a big enough part of our business to jump through the hoops.
Posted: Fri Sep 04, 2009 01:37 am Post Subject:
It's not just the hoops of becoming registered. It's the hoops of then having to have FINRA involved with every piece of your business when they really should have no right to be.
It's complete B.S. The ironic thing is that if they do become registered products, I'll be able to sell them again. I can't sell them because my B/D doesn't want the supervisory responsibility when they don't make a dime from them.
Posted: Fri Sep 04, 2009 01:46 am Post Subject:
Yeah I know. Weak sauce.
Posted: Mon Jan 18, 2010 12:25 am Post Subject:
I will not get registered. I do not want to hold a license that will put me in a class of the undesirable. Registered reps have a license to steal. With all the corruption and greed in the market, I will sell LTC and medicare supplements before I lower myself to the level of scum. Med supps pay a level commission for 6 years in most states. Can provide a nice steady income.
Posted: Mon Jan 18, 2010 06:43 pm Post Subject:
It's not just a matter of getting licensed. It means finding a B/D to sponsor your getting licensed. Probably LPL for the independents (I'm sure they'd love to see EIAs become regulated products). Then it's a matter of having the B/D take it's cut of your commissions (despite still making you pay fees to the B/D). It's a fee ridden world much like the banking industry. And several around here seem to think that I'm a champion of the securities industry.
Insuranceexpert,
I'm intrigued by the situation you are in. The B/D I'm with has an approved list of EIAs and forces business to flow through them, collecting commissions like any other product. I think there's more to their unwillingness to allow you to do EIA business tha goes beyond simply not getting paid for processing the business. For many, it's fear of lawsuit.
It's my opinion that B/D shouldn't be involved in preventing agents' selling EIAs at this point. I also suspect that making it a regulated security will do nothing to stop problems with the products. It's merely an attempt for B/Ds to get in on the market and make money off the product.
However, I'm also very much of the opinion that a lot of agents sell these products will little to no understanding of how the stock market works/has worked and as a result their ability to grasp what's really going on and how the product most likely will work is weak at best.
Posted: Sun Jan 24, 2010 04:55 am Post Subject:
However, I'm also very much of the opinion that a lot of agents sell these products will little to no understanding of how the stock market works/has worked and as a result their ability to grasp what's really going on and how the product most likely will work is weak at best.
That hit the nail on the head! EIAs -- and EIULs (that the SEC conveniently overlooked) -- are products that too many agents who cannot pass the S6/S7 exams sell because they get to say crap like, "You get all of the upside with none of the downside." Which most of us know is not true. But it's what they've been taught to say.
The fault is not in the product, it's in the marketing of the product. It was unwise of the SEC to try to equate EIAs with securities on this basis (even though all the rhetoric was about the inner workings of the products), and it was equally unwise of the court to agree.
It's my opinion that B/D shouldn't be involved in preventing agents' selling EIAs at this point.
Nice opinion, but the SEC settled that matter with its B/D Advisory a few years ago (2006, I think, maybe 2007 . . . it might have been as early as 2005 -- it's all a blur these days) that laid them squarely on the desk of every S24/S26 supervisor. And from that perspective, some B/Ds decided against allowing their RRs to market anything other than true VUL/VA products. Just makes the supevisor's job a little less complex.
If they don't become utterly emasculated over their national health care "crisis", Congress, now that the Supreme Court has opened the graft floodgates once again, is highly likely to become involved -- if the money starts flowing in (oh, it will) -- and deregulate EIAs legislatively, which is probably also a mistake, but may be the only way to get the SEC off the back of the EIAs.
To steal that line from Rodney King (what seems like) a zillion years ago -- "Can't we all just get along?"
Posted: Sun Jan 24, 2010 12:34 pm Post Subject:
BNTRS, sorry that I didn't see your question to me earlier. I'm with an independent B/D. I think that the issue for them is that they have the responsibility to monitor outside business activity and at the same time they have no ability to force me to put EIA's through the grid.
As an analogy, it would be like them allowing me to work as a stripper on the weekends, but only on the condition that I get paid through the grid.
Posted: Mon Jan 25, 2010 12:40 am Post Subject:
Interesting, the approved list I have are all companies that the B/D has selling agreements with for VA products, so the companies automatically require the business be sent through the B/D, which then pays commissions in the same GDC fashion variable products do. My guess has always been this was one of the determining factors in who got on the list.
Posted: Mon Jan 25, 2010 01:13 am Post Subject:
It's an interesting subject. Because my B/D is independent, we aren't employees. However, because of the industry, they still have some level of control over us. They do have the ability to tell us that we can't do certain outside activities, but they can't tell us that we have to give them a cut of outside business activities.
As a business decision, it makes sense that they don't allow us to sell EIAs since they can't make a dime on them. That being said, I think that it's B.S. on their part.
Posted: Tue Jan 26, 2010 04:49 am Post Subject:
That, and there must be other independent B/Ds that have a more relaxed policy on EIAs.
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