Regulations are important in our industry. We deal with very complex products and there should be a third party that keeps us honest.
We have all worked in an office with bad apples, we have all been in competition against them, we have all wondered how they are still employed, and we all continue to fight against the reputation they have given our industry.
I do not envy the shoes the regulators stand in. However, I would like to pose a hypothetical scenario and ask why the regulators seem so fixed on our slice of the Financial Services Industry but not on others.
If one of Algren’s brokers has a client with a non-qualified annuity, that is out of surrender charges, and they want to 1035 the funds into a new annuity with higher yields the broker must go through an application, suitability questionnaire, replacement paperwork, and complete specific training on the new product (if they have not sold it prior).
If six months later, that same client’s money manager tells the client that the annuity is no good, they should surrender it, and invest in a new CryptoCurrency ETF in their wrap-fee account, there is little to no red-tape. There is no lengthy application, there is no product training, there is no replacement paperwork. There may be some additional suitability requirements.
Is it in the client’s best interest that it is harder to 1035 between two annuity contracts and trigger no taxable event or surrender charge than it is to surrender an annuity during the surrender charge period and trigger a taxable event in favor of extreme speculation?
We need more regulations.