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On December 17, 2008, the Securities and Exchange Commission (SEC) adopted their proposed rule 151a. The proposal passed by the SEC's board on a vote of 4 in favor and 1 opposed. This rule proposes to make Fixed Indexed Annuities (FIAs) a security in two years.
IMPORTANT!
THE WORST CASE SCENARIO TODAY IS THAT YOU HAVE 2 FULL YEARS TO COMPLY
If you desire to continue selling FIAs, simply stay right where you are. The fastest this process can happen is 2-years and there are elements already in play that will extend this period in our opinion. The worst thing you can do is run out and take your securities exam and fall into a Broker/Dealers supervision pre-maturely.
Here's why:
Over the last year, we have participated closely with other concerned insurance professionals and companies to oppose this rule. The leading companies have already formed a Coalition for Indexed Products. The Coalition for Indexed Products is prepared to file legal action to bring this issue before a judge.
Historically, indexed annuities have already been tested in court and the findings have always been that they are NOT a security. We believe this venue will allow the Coalition to succeed and keep our products within the fixed arena. This legal process can take many years to complete.
So, if the insurance companies do not fight back, we have 2 years before we must change. If they do fight through legal channels we will see the window for "business as usual" stay open for a much greater period of time.
Your Next Steps...
A2Z Annuity Marketing, Inc. is dedicated to seeing this issue through to the end and providing independent agents with an accurate voice on this topic. We will let you know of the activities of the Coalition for Indexed Products and we will advise you as to the most profitable way to proceed for your practice.
New products and new opportunities...
One positive aspect of this SEC activity is that insurers have now launched highly innovative traditional fixed annuities that include benefits not available in FIAs! We have been asked by hundreds of agents, "What if I do not want to become securities licensed? Will I be able to make a good living without an FIA to sell?" The answer is YES! We are fully confident that the new traditional products can completely replace the sales opportunities you had with FIAs. To do this, you will need to be fully knowledgeable of new income planning techniques along with new death benefit riders and tax advantaged strategies.
During the last year we have developed an entire consumer workshop dedicated to Retirement Account Optimization. This technique does not use an FIA at all and is getting huge results in the field. Our "Triple Split" income tool plays to the strength of fixed products. Our new Roth Conversion case designs open up substantial opportunities.
What to aviod...
Avoid marketing firms that are telling you the sky is falling and that you need to jump into their boat to fix it. You are about to get deluged with false statements from firms who are going to attempt to manipulate your future to benefit themselves.
Stay calm, sit tight and wait for the first steps to take place. The first steps must be taken by the insurance companies, not by the producers. We will provide you with solutions should you need to become securities licensed or not.
We will keep you informed so you can go forward with confidence and solid profits in the future!
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