Getting Your Series 65 License

Many advisors remember 151A when the SEC tried to regulate FIAs as securities. It freaked out many advisors who were worried about losing their livelihoods (advisors who mainly sell FIAs). 151A was the motivation thousands of advisors needed to obtain their Series 65 license. I was at the forefront of recommending insurance agents get their 65 for several reasons:

Protection from regulations
Give better/more comprehensive advice to clients
Generate more revenue
Generate reoccurring revenue

Nothing in my mind has changed. I’m still a huge advocate of advisors getting their 65 license. What has changed is our teams ability to help advisors.

1) We have Advisor Launchpad (helping advisors build a book of assets under management (AUM) BEFORE getting your 65)

2) We have an advisor owned RIA with a killer AUM platform (and one that fully embraces the proper use of FIAs in a portfolio).

To learn more about the RIA platform, click here.

If you are an insurance agent worried (rightfully so) about losing your ability to use IRA money to buy FIAs or if you are just ready to expand your offering and open up new revenue streams, I highly recommend you start studying for and ultimately pass the Series 65 exam.

Roccy DeFrancesco, JD, CAPP, CMP

Annuities Industry Worried About ‘Worst-Case’ DOL Fiduciary Redo, Attorney Says

To read the original article on FA Magazine, click here. February 9, 2023 • Tracey Longo

The annuities industry remains concerned that the U.S. Department of Labor is working on rules that could make it difficult for independent insurance advisors to offer even a one-time annuities recommendation to retirement plan roll-over investors without triggering fiduciary duty, a senior Washington, D.C. insurance industry attorney said today.

“Based on some discussions we’ve had with the DOL staff, we know they have a strong desire” to propose a new fiduciary rule this spring, so it can be finalized by yearend, said the industry attorney, who spoke on condition of anonymity.

The industry’s greatest fear is that the DOL is moving to modify or eliminate a current exception (PTE 84-24) that allows Independent insurance agents to recommend annuities and accept compensation for rollovers without having to become fiduciaries.

“The worst-case scenario is… they pursue a drastic overhaul and comprehensive rewrite of the rules for fiduciary investment that goes even further than their current interpretation, essentially much like they did in 2016, trying to bring nearly all interactions between financial professionals and retirement savers under that fiduciary umbrella and then having a significant restriction on the ability to utilize the existing exemptions,” the attorney said.

Both the annuities and insurance industries were plaintiffs in a winning 2018 lawsuit that forced the DOL to vacate its Obama-era fiduciary rule and its much broader application of fiduciary duties.

“If they were to eliminate for example [exception] 84-24 and provide no accommodations for folks in the independent channel you would have a whole massive amount of people who rely on these independent producers for financial advice who would lose the ability to work with them,” he added.

The attorney said that independent agents, such as those who work with independent marketing organizations, would have a hard time meeting the new rule’s requirement that they have co-fiduciary that accepts liabilty for rollover advice gone wrong.

Independent insurance agents are regulated by the states and, in most jurisdictions, are subject to fewer regulations than those at insurance companies and brokerages. Some believe this lax regulation creates an environment that is vulnerable to abusive sales practices.

“In this context, we are talking about producers … who are not affiliated with a broker-dealer, registered investment advisor or bank, and recommend or sell annuities issued by an insurance company that does not and can not exert legal contractual control over the producers’ conduct,” the attorney said.

As a result, the organization has no ability to manage or mitigate any conflict they may have in connection with the recommendation or sale, even if they were to take on co-fiduciary status,” he added.

The best-case scenario would be that DOL staff “stand down right now. They put whatever they’ve got in the works in their desk drawer and they let the existing framework of rules … exist in the real world together for some time. … Then they evaluate if there are gaps,” the attorney said.

The annuities industry wants the DOL to observe how the SEC’s Regulation Best Interest standard of conduct rule works with state and DOL rules before proposing more regualtion. The newest DOl rule was only fully rolled out in December, 2021, he said.

Failing that, the attorney said the presidential election cycle and the political optics that will quickly ensue could deter any major proposals from federal agencies.

The Department of Labor did not respond to a request for comment.

“In terms of timing, the DOL may have a bit of a challenge on its hands if it doesn’t move quickly to get a proposal out. As we get closer to 2023,  the presidential prelection cycle will get into full swing and the Biden administration will not want its agencies to issue controversial proposals that could have an adverse impact on the president’s election prospects, if he decides to pursue re-election.

“And we simply don’t know if the administration would view a fiduciary proposal as potentially risky through that lens,” the attorney said.

Labor Secretary Marty Walsh’s recent announcement that he will be leaving his post sets up another variable.

“The administration will have to consider the potential impact that a new fiduciary proposal will have on the confirmation process of whoever they select to succeed Secretary Walsh,” the attorney said.