What Are My Next Steps?


I am frequently asked the question, “As an insurance only advisor what are the next steps I need to take so I can continue to sell Index Annuities after the new DOL Regs go into effect next April?” The first thing I would say is take a deep breath, relax and don’t do anything…yet. Unfortunately there are a number of FMOs implementing a fear based marketing campaign with a message that the sky is falling, they have it all figured out, and if you want to stay in business you need to align with them. There is no question that our business is going to experience significant change, but the reality is that no one has all the answers yet and if they say they do you should run the other way. There are going to be several options for advisors under the new rules. Let’s look at a couple of directions that are available to agents that work with PFG and keep in mind you have time to choose the path that is best for you.

If you plan to retire in the next 5 years, are considering a career change, or simply want to remain an insurance only advisor, you will need access to a Fiduciary/Suitability Compliance System and a Financial Institution that will sign the BICE agreement for you. PFG, in conjunction with industry partners, is in the beta test phase of a cloud-based insurance assessment system that delivers an assessment of a client’s financial planning goals, risk tolerance and time horizons that guides the advisor and client to insurance solutions serving the client’s best interests. Utilizing our system, an insurance only advisor will have a streamlined and uniform suitability platform and submission process as well as sign off on the BICE by our Financial Institution. This system will allow an agent to remain independent in the post-DOL world. The platform is intuitive making it very easy to use. We anticipate the system will be out of beta and fully functional within the next 60 days.

If you plan to be in the financial services business for more than five years you may want to consider becoming an Investment Advisor Representative under an Annuity Friendly Registered Investment Advisory firm. It is apparent that one of the impacts of the DOL is to move financial services away from a sales model to an advice based model. Whether you are an IAR or not under the new DOL rules you will be acting as a Fiduciary and will be required to implement a comprehensive and continuous strategy with your clients. Consider a plan that you develop for prospective clients that calls for 40% of their retirement assets to be invested in fixed income annuity products to solve a gap in guaranteed income. As an insurance only advisor you may be able to sell annuities to take care of the guaranteed income gap but who is going to advise them on the other 60% of their assets? Our experience shows that an advisor that is able to manage the entire plan for the client is more likely to make this prospect a client.

Most agree that the DOL is only the beginning of moving our entire industry to an asset/fee based system. It makes sense to take the 65 exam and prepare yourself for the future. If you are considering becoming an IAR we can help you with this decision and guide you through all the steps from passing the 65 exam to training that will provide you with all the tools and assistance that you need to become a highly successful advisor. .

Stay tuned for our next discussion: What is the difference between BICE and PTE 84-24 and when do I use each?

#patent #trademark #dol #fiduciary #finance

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