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Rep. Ann Wagner’s bill to repeal the Labor Department’s fiduciary rule, the Protecting Advice for Small Savers Act of 2017, H.R. 3857, passed out of the House Financial Services Committee on Thursday.
The bill, which passed by a vote of 34-26, now goes to the House. Wagner, R-Mo., introduced her bill, which keeps a fiduciary rule-making under the Securities and Exchange Commission’s jurisdiction, on Sept. 27.
Wagner’s PASS Act establishes a best-interest standard for broker-dealers, and as she said recently, repeals Labor’s rule, “period. Full stop. And it gets the Department of Labor out of the broker-dealer space.”
Brokers Violating DOL Rule by Shifting Clients to Fee Accounts: RoperConsumer Federation of America urges regulators to investigate if firms are “found to be exploiting the DOL rule to profit...
SEC Chairman Jay Clayton told House lawmakers on Oct. 4 that the agency is working on its own fiduciary rule and that “a lot of the themes that you outlined [in the PASS Act] are the themes that I have.”
Opponents of Labor's fiduciary rule were quick to respond to the advance of Wagner's bill.
Dale Brown, president and CEO of the Financial Services Institute, said that Wagner's PASS Act "paves the way for a best interest standard for financial advice created by the SEC, something we have long supported, while ensuring investors continue to have access to affordable, objective financial advice as well as a wide array of products and services to assist them in saving for a secure retirement."
Dirk Kempthorne, president and CEO of the American Council of Life Insurers, applauded committee passage of the bill, stating that it "represents an important step toward efficient and effective uniform standard of conduct regulation that would ensure Americans receive financial advice that is in their best interest while also maintaining access to the financial products and services they want and need."
Kempthorne encouraged the full House to pass the legislation, which he said "also encourages state insurance regulators to adopt a similar standard for the sale of annuities."
ACLI looks forward "to working with the Congress, the Securities and Exchange Commission, the Financial Industry Regulatory Authority, state insurance regulators, Labor and all interested parties on public policies that help Americans achieve their financial and retirement security goals," he added.
Other bills that passed out of the committee include H.R. 3758 the Senior Safe Act of 2017, and H.R. 3973, the Market Data Protection Act of 2017. The Senior Safe Act "is a critical step in preventing elder financial abuse nationwide," said FSI's Brown. "It allows financial professionals to report abuse to government organizations, without violating privacy laws, as well as standardizes training to help identify and report instances of suspected abuse."
The Market Data Protection Act "will help protect investors’ personal information from falling victim to the next cybersecurity breach," added Brown. FSI "strongly encourages the full House of Representatives to bring these bills to a vote and pass them quickly. Now more than ever, cybersecurity and the protection of personal information is of utmost importance."
A total of 22 bills passed out of the committee on last Wednesday Oct 11 and Thursday Oct 12.
H.R. 1585, the Fair Investment Opportunities for Professional Experts Act, amends the Securities Act of 1933 to modify the definition of accredited investor to include:
(1) persons whose individual net worth, including their spouse’s, exceeds $1 million, excluding the value of their primary residence;
(2) persons with an individual income greater than $200,000, or joint income with one’s spouse greater than $300,000;
(3) persons with a current securities-related license; and
(4) persons whom the U.S. Securities and Exchange Commission (SEC) determines have demonstrable education or job experience to qualify as having professional subject-matter knowledge related to a particular investment.
The Family Office Technical Correction Act of 2017, H.R. 3972, which passed by a 60-0 vote, clarifies that family offices and family clients are accredited investors under Regulation D of the Securities and Exchange Commission if they have more than $5 million in wealth.
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The Department of Labor's transitional version of its Fiduciary Rule is scheduled to take effect June 9th, 2017.
To help you through the transition process, we have put together a Producer DOL Preparation Kit that contains all the necessary documentation you will need.
We've also provided further explanation of each document in the kit and procedural guidance below.
Since you will now be considered a fiduciary June 9th and after, you are legally and ethically bound to act in the best interests of your clients when writing qualified business.
An important announcement was made regarding the DOL rule and how it affect annuity sales starting June 9th! Hear how WIN Group in partnership with our distribution partner, First Annuity, will be prepared to help advisors through the transition to continue selling fixed index annuities, whether or not you decide to get securities licensed!
We have the answer the for all the questions above. WIN Group has the resources to assist you in continuing your index annuity practice. Find out how!
Call our marketing team at (888) 244-5764 ext. 200 to learn more.
Annuity advisors not offering enough option...
The 3rd Annual Guaranteed Lifetime Income Study has found that, even though most retirees and pre-retirees want a wide variety of retirement strategies presented to them by their financial advisors, they rarely feel these are provided. Consumers also believe that there is a responsibility on the part of financial advisors to guide them towards products offering guaranteed lifetime income. More than 50 percent saw annuity products as an option they would likely consider.
The survey found that only a third of consumers were very familiar with annuities, and even fewer understood that there were annuity products that would guarantee a certain income level for life. It would appear that there is a significant potential annuity sales market, but a “disconnect” exists between what consumers want and what their financial advisors provide. The fact that only 3 in 10 consumers surveyed have discussed guaranteed lifetime-income products with their financial advisors is a sign that potential annuity buyers are not finding the information they need.
Instantly Download the FULL Annuity Survey Report Now!
The survey and associated research were jointly produced by Greenwald & Associates, a full-service market research firm based in Washington DC, and CANNEX, a Canadian provider of consumer-market analytics to the financial services industry that is based in Toronto. The survey covered 1,105 consumers from the ages of 55 to 75 with a minimum of $100,000 in investable assets.
It is clear from the survey that consumers planning for retirement would like to consider a wide variety of options. Nine out of ten respondents desired multiple retirement strategies from their financial advisors and 60 percent believe there is a responsibility on the part of finance professionals to lay out guaranteed-income products like annuities to their clients.
Even though annuities are an option many retirees and pre-retirees desire, sales of such products are actually in decline. According to LIMRA, a financial services research organization based in Connecticut, a total of $222 billion worth of individual fixed and variable annuities were sold in 2016, a 6 percent decline from 2015. The low interest rates seen since the onset of the Great Recession have dampened the sale of annuities, as have the cost and complexity of products.
The best-known annuity program in the United States is actually Social Security, which is the foundation for the retirement years of most Americans. Annuities sold by life insurance and retirement companies can be a stable supplement to this universal program.
Among the survey’s other findings:
“The data shows when it comes to their investment portfolios, consumers are focused on risk assets including equities, but at the same time want to ensure that in retirement they will have the income they need to meet their needs,” said Gary Baker, president of Cannex USA, via a press release. “The lack of familiarity about specific products underscores the importance of providing advisors and their clients options to meet both needs.”
According to the research, potential annuity buyers are three times more likely to add such products to their portfolio when financial advisors present them as an option. This indicates that retirement advisors need to rethink their assumptions about what best serves their clients. It would appear that income-generating products simply are not emphasized enough, even though many annuity products are available.
“Americans are comfortable with the idea of working towards a savings goal as they approach retirement,” according to the Greenwald & Associates press release announcing publication of the study. “They are less used to the idea of working towards an income goal once we reach retirement. This makes it difficult to see how guaranteed lifetime income products might fit into one’s strategy for funding retirement.”
The gap between the desires of consumers of financial retirement products and the options presented by professional financial advisors needs to be more closely examined. Overall annuity sales remain flat, even as many consumers understand the value of annuity products as a part of their retirement strategy.
Misconceptions and myths about retirement may be holding many back from proper planning.
In an effort to understand Americans’ knowledge about retirement planning, Fidelity Investments conducted a first-ever Retirement IQ Survey in December.
The response was not encouraging. Many, including those 55 or older, missed the mark on key retirement questions, and adhered to several myths and misconceptions that could be holding them back.
“Although retirement may seem far off for many, there are retirement concepts everyone should know to ensure you’re able to fulfill the goals you have for yourself and your family,” Ken Hevert, senior vice president of retirement at Fidelity, said in a statement.
“We encourage investors to think about the goals they want to achieve and develop a plan to get there, but it starts with knowing where you stand in order to identify opportunities to improve.”
ORC International conducted the online survey in mid-December in two phases: first, among a sample of 1,007 respondents ages 55 to 65 who are not retired; then, among a demographically representative U.S. sample of 1,047 adults comprising 512 men and 535 women 18 and older.
Following are the eight questions Fidelity asked respondents, along with the correct answers and how often respondents got them right...complete the quick form below to download full report instantly!
Benefit 10 Annuity get's a facelift. Increased premium bonus and income rider payout rates. Click Here to download the latest rate sheet.
Allianz Life- Effective March 31, 2017 Allianz Life will discontinue the sale of the MasterDex X and Endurance Plus annuities. Please click here for additional details.
Legacy Marketing Products
Legacy Americo Annuities
Legacy has recently increased the rates for the LibertyMark and LibertyMark SE product lines. Here are the current rates, if you have any questions or would like to see how these new rates stacks up give your advisor consultant a call.
North American Annuities in CA
North American is glad to reintroduce the following products back into the California market. They will become available effective Tuesday the 14th and are listed below with a link for product information on each:
RetireChoice 10 and 14:
Income Choice 10:
Charter Plus 10:
Guarantee 3 and 5 year MYGA's:
Phoenix is raising rates on all products Effective February 1st. Click here for more info.
Confusion about the Trump administration’s announcement calling for a review of the DOL fiduciary rule less than three months before it’s due to take effect could find some resolution this week.
“We’re expecting to see a very short, simple notice in the Federal Register that will delay the rule most likely by 180 days,” said Erin Sweeney of the Washington, DC-based law firm Miller & Chevalier. Her best guess: a notice published on Tuesday.
In that case the notice would likely occur before a ruling by Dallas federal judge Barbara M.G. Lynn on a pending lawsuit opposing the rule. On Thursday, the judge issued a one-sentence notice to parties to the to the suit, which include the U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association, the Financial Services Institute and others, that she intends to rule no later than Feb. 10. That may be one reason the Trump administration issued the memorandum as soon as it did, before its new secretary of labor was confirmed.
The 180-day delay that Sweeney says is most likely is the same timeframe included in a draft version of a White House memorandum that circulated early Friday morning. By the time the final version of the memorandum was released later Friday afternoon, however, there was no mention of a time frame or a directive for the DOL to work with the Justice Department to halt pending litigation over the rule, which was also included in the draft order.
Also excluded from the final memorandum, but included in the draft, was a specific order for the DOL to analyze prohibited transaction exemptions, which were an integral part of the rule, and to consult with DOJ about whether the fiduciary rule violates the “Administrative Procedure Act or any other applicable statute.” The APA governs the way federal administrative agencies may propose and establish regulations.
Following release of the final memorandum on Friday, acting Labor Secretary Ed Hugler, in a statement, said, “The Department of Labor will now consider its legal options to delay the applicability date as we comply with the president’s memorandum.”
“We’re back to where we were in the beginning,” said Sweeney.
She expects that after the DOL issues an official notice delaying the rule, there will be a stay of litigation relating to the rule and then a notice from the DOL asking for public comment on the issues that the Trump administration listed in its final memorandum, which directs the DOL to “prepare an updated economic and legal analysis concerning the likely impact of the Fiduciary Duty Rule, that considers:
If the DOL concludes that the rule will cause any one of those results or is inconsistent with any priorities identified in the memorandum — they include empowering Americans to make their own financial decisions and facilitating their ability to save for retirement and build their individual wealth — then the DOL can publish a proposed rule that rescinds the existing one or a revised rule, asking for public comment.
It doesn’t appear on the surface at least that the DOL would have much difficulty justifying either move.
The agency could also issue an interim final rule before six months have passed, which would take effect immediately but also be the subject of public comment, said Sweeney.
A new rule could, for example, modify the current rule so that a Best Interest Contract Excemption would not be required when an advisor recommends that a client recommends that a client roll over money into a 401(k) plan or the rule could be modified to exclude the possibility of class-action suits for alleged violations of the rule, which is included in the current rule.
In the meantime, Sweeney is advising her clients, who are retirement plan fiduciaries and financial service providers, to hold tight until there is more direction from the DOL.
“Don’t commit to anything. Don’t sign anything. If you’re one of those plan fiduciaries that has decided to have an advice module you need to step that back and reach back to the record keeper. If you’ve signed any disclosure effective in April (the original effective date of the current fiduciary rule is April 1, 2017), be clear you’re not bound to undertake any of these actions. You don’t want to accidentally roll out a product that turns out not to be compliant.”
Tips to Establish Rapport Over the Phone, at Your Prospect's Home or Your Office
If you can establish common ground with your prospects, they will like you, trust you, and buy from you.
What do you do to establish rapport? Are you sharp enough to find something besides business after you open to conversation? Here are some ideas you can try on the phone, at the prospects home, at your place of business or networking event.
ON THE PHONE: It's likely that you're calling to make an appointment, so focus on these 4 things:
1. Get to the point in 15 seconds
2. Be happy and humorous
3. Get to know something personal about the prospect
4. Nail down the appointment
You first begin to establish rapport by getting to the point! State the purpose of your call immediately. It's not necessary (and it's often a put-off) to ask the insincere "How are you today?" Just state your name, your company name, and how you can help the prospect. Once you've done that, there is a sense of relief of both sides. The prospect is relieved because he/she now knows why you've called, and you're relieved because of prospect hasn't hung up on you. Now you can go about the task of establishing some rapport and setting the appointment.
Try to use humor at least twice during the conversation (but don't force it). People love to laugh. A quick, clean 10-second joke can do more for buyer rapport than 10 minutes worth of sales talk.
You can gain insight by listening. Prospect mood, hometown, and personality will all be revealed in just a few minutes on the phone. I listen closely for speech accent. It gives me a clue about where my prospect hails from - a great subject if you're well traveled or come from the same place.
Listen for and be sensitive to the mood of the prospect. If he or she is noticeably short of gruff, just say, "I can tell you're busy. Why don't we pick a time more convenient for me to call?"
Establish prospect rapport before you begin your pitch. The best way to win the sale is to first win the prospect. If you find common subjects or interests with a prospect, you can establish a business friendship. People are more likely to buy from a friend a salesman.
AT THE PROSPECT'S HOUSE: This is the easiest place to establish rapport.
Look for clues as soon as you walk into the prospect's place of business. Pictures, plaques, or awards on the wall; magazines subscribed to that don't match the business. When you get in the prospects house, look for pictures of children or events, bookcase items, books, diplomas, awards, desk items, or anything that reveals personal likes and/or leisure pursuits. Ask about an award or trophy. Ask about a diploma or picture. Your prospect will be glad to talk about what he or she has accomplished or likes to or likes to do.
Try to engage prospects in intelligent conversation with open-ended questions about their interests. It's obviously better if you're well versed on the subject, but the point is to get prospects to talk about what makes them happy. Use humor. Humor builds rapport because it constitutes an agreement (when a prospect laughs). Getting the prospect to laugh will set the stage for a positive presentation.
AT YOUR PLACE OF BUSINESS: When your prospective customer comes to your place of business, it is more difficult to establish common ground because you don't have the advantage of telling items that would be present in his or her surroundings. So, be observant. Look at clothing, car, rings, imprinted items, their business card, or anything that gives you a clue as to the type of person they are.
Be friendly. Ask open-ended questions. Try to find out what they did last weekend, or what they're doing this weekend. Ask about a movie or television show. Avoid politics and their personal problems. And don't lament about your personal problems.
People love to talk about themselves. Ask the right question and it's tough to shut them up. Your objective is to find a subject, idea, or situation that you BOTH know about or are interested in.
Be real. It's as easy to spot insincere salesperson as a skunk in your living room. Both smell awful
One word of caution: Be aware of the time when building rapport. The time you're permitted to spend building rapport has a lot to do with where you live geographically. In the Northeast, you may have as little as 30 seconds. In these situations I try to be direct immediately. Gain interest first. Then go for some rapport.
In the South, Midwest, Southwest, and West, you can spend 5 to 10 minutes establishing rapport. Don't lose sight of your mission, but, I can assure you the mission is most likely to be accomplished if you make a friend before making a presentation. The key is getting prospects to talk about themselves. This will give you a chance to find common ground, establish rapport, and increase your chance to make a sale.
NO RAPPORT, NO SALE!
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