"Kickbacks pose an especially dangerous problem. When companies can offer kickbacks to agents for recommending high-cost financial products, and when those kickbacks are hidden from the customers, the likelihood that consumers will be duped into buying bad products increases sharply.
To explore the prevalence of this type of conflict of interest, in April 2015 Sen. Elizabeth Warren (D-MA) opened an investigation, asking fifteen leading annuity providers for information on whether they offered non-cash incentives such as lavish cruises, luxury car leases, and other perks to annuity sales agents to promote their products and whether their customers were aware of the agents’ compensation arrangements."Reading this report one wonders how the insurance industry continues to get away with such unethical and clearly conflicted business practices, it's a testament to the power of that industry and Warren is confronting them head on.
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| Primerica Million $ Club |
Since taking the top job in Longview ISD, Superintendent James Wilcox has had a side business selling what he calls retirement planning to educators. As of this week, however, he and his representatives won't be peddling their products on Longview ISD campuses.
After representatives from Primerica — a company some say is essentially a pyramid scheme — made their pitch Oct. 22 at Longview High School, the district's school board directed Wilcox to "not allow any meetings of this type on any LISD property in that future," Wilcox said last week.
"That will be fully complied with in the future," he said.
A portion of the district's employee policy manual seems to prohibit such an on-campus sales pitch, but Longview ISD board President Chris Mack said last week he didn't see anything wrong with the company's services being sold on district property. The manual, however, prohibits employees from using their position with the district "to attempt to sell products or services."
The board made its decision, Mack said, not because of its policy but after hearing an uproar from the community.
"We got a lot of complaints," he said. "I honestly think James is trying to help people. Here's the thing: Nobody was forced to go to that meeting. ... Had he forced people to go, had he forced people to sign up, that would be inappropriate.
"We got a lot of complaints, but there was no pressure there. But because of the fallout, we felt like it would be better if we didn't allow it anymore. It's a shame that we had to say that because there was a lot of potential there."Wilcox isn't the first person or educator for that matter to fall for the siren's call of Primerica. Who wouldn't want to earn an extra income while helping our nation's educators? Yet Primerica is NOT a financial planning company, it's a product sales company and is focused first on selling those financial products as well as recruiting others to sell their products, a multi-level marketing type business.
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Member Service
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Date
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Times Available
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Glendale
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Tuesday, 10/20/2015
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10 a.m. – 4:30 p.m.
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Irvine
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Wednesday, 10/21/2015
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10 a.m. – 4:30 p.m.
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Santa Clara
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Wednesday, 10/21/2015
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10 a.m. – 4:30 p.m.
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Riverside
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Thursday, 10/22/2015
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10 a.m. – 4:30 p.m.
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West Sacramento
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Thursday, 10/22/2015
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10 a.m. – 4:30 p.m.
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"Some players in the K-12 403(b) plan marketplace say the traditional model—in which plan participants have individual relationships with advisers..."No, plan participants do not have individual relationships with "advisers", they buy products from salespeople who are mostly Registered Representatives and Life Insurance Agents, not Advisers. There is a difference between a salesperson and an advisor and this article deliberately obfuscates this distinction ignoring the huge battle going on at the Department of Labor right now.
“I think depending on built-in assumptions, especially how long someone is going to hold on to investments, you can make an argument that buy-and-hold type investors will incur less fees in commission-based investment than fee-based over the long-term,” Wolff says."I won't even waste the space dissecting what is wrong with this quote. But I will say, where is the "balance"? Why didn't Plansponsor interview someone who actually works in this market on a Fiduciary basis?
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Yesterday I received the following "take down" notice from Go Daddy (my blog hosting company). The Annuity Store insurance marketing company has hired an attorney to stop my blog post from showing their e-mail advertisements and what is behind Annuity recommendations that their agents make. I posted their e-mail advertisement to show the public what they don't see - this is a public benefit. Scroll down to see the claims made.
Dear Customer, |
"Because, in our view, Wells Fargo went beyond being gay-friendly to being a public advocate — through a national TV advertising campaign — for a lifestyle we, as a Christian organization, believe to be biblically wrong. (The ad featured a lesbian couple with their adopted child.)"While I personally find this reasoning bigoted and ignorant, it's certainly his right to move the organization's money wherever he likes. But shouldn't this decision apply to all of the finances of Samaritan's Purse and the Billy Graham organization?
WASHINGTON, DC - In letters sent to 15 of the country's largest annuity providers today, United States Senator Elizabeth Warren raised concerns about the rewards and incentives these companies offer to brokers and dealers who sell annuities to families and small investors. The letter explains that "annuity providers offer a vast range of perks - from cruises to international travel to iPads to diamond-encrusted ‘NFL Super Bowl Style' rings to cash and stock options - to entice sales of their products."
"I am concerned that these incentives present a conflict of interest for agents and financial advisers that could result in these agents providing inadequate advice about annuities to investors and selling products that may not meet the retirement investment needs of their buyers," Senator Warren wrote. The Senator notes particular concern about the impact on individuals who are on the verge of retirement because they have little time or ability to recover potential losses from bad investments.
The questionable practices identified in today's letters highlight the need for a strong conflict-of-interest rule from the U.S. Department of Labor (DOL) to protect retirees by requiring advisors to act in their clients' best interests. DOL released a proposed rule earlier this month. "Annuity agents that are more interested in earning perks than in acting in their clients' best interest can place Americans' savings and retirement security at risk," the Senator wrote.
Senator Warren today asked annuity providers for information about the incentives they offer, the number and value of the incentives awarded, and the companies' policies for disclosing these potential conflicts of interest. The letters were sent to the 15 companies with the highest 2014 U.S. individual annuity sales: Jackson National Life, AIG Companies, Lincoln Financial Group, Allianz Life, TIAA-CREF, New York Life, Prudential Annuities, Transamerica, AXA USA, MetLife, Nationwide, Pacific Life, Forethought Annuity, RiverSource Life Insurance, and Security Benefit Life.
A PDF copy of the letters is available here. Examples of the kinds of incentives companies offer to annuities brokers and dealers is available here.