Surprise 84-24 FIA Inspections May Cost Agents Their Contracts
Suitability is huge right now with Fixed Indexed Annuity (FIA) sales. After you read this newsletter, many will want to sign up to learn about the “FIA with an Income Rider Exit Strategy.” To sign up to learn more, click on the following link:
Why do advisors read my newsletters? To learn about the best products, to learn what products to stay away from, to learn about the best market tools, and then because of topics like the one I’m covering in this newsletter (one that will help hundreds avoid losing their ability to sell FIAs).
Surprise Compliance Inspections-I heard last week from a very reliable source that one prominent FIA company is strongly considering doing surprise inspections of whether agents are complying with 84-24. I hear the company doesn’t think very many agents are doing what is needed to comply with 84-24.
Termination-the consequences of not having followed 84-24 will be termination of contracting (meaning agents will not be allowed to sell FIAs of the inspecting company).
84-24-It seems that many agents selling FIAs FORGOT that 84-24 is still in place and something they need to abide by on EVERY FIA sold in an IRA or qualified plan. To remind readers, anyone selling an FIA is now a fiduciary that must comply with 84-24 when making an FIA sale.
84-24 requires that advisors follow the impartial conduct standard and agents must….
1) give clients the best product recommendation/advice a similarly situated agent would give without regard to the financial or other interests of the advisor.
2) make no materially misleading statements.
3) disclose fees/charges-surrender charges, rider fees, etc. prior to the sale.
4) disclose to clients the commission made on the sale. The compensation has to be “reasonable.”
5) disclose conflicts of interest such as telling clients that the sale will help the agent qualify for free insurance company trips or reach extra bonus commissions.
Six years – 84-24 requires that advisors keep their correspondence with clients for six years.
Help with compliance!
Let’s face it, most agents don’t like 84-24 and will look for excuses not to comply. One excuse is paperwork. It’s too big of a pain in the neck.
That’s why I created a website where agents can go to fill out the needed 84-24 disclosure forms. You go to the site, fill out the forms, print them, and sign the forms and save them.
Where can you find the site? www.8424compliance.com
On the site there is an 84-24 Disclosure & Acknowledgement, a Best Interest Questionnaire, and even an Attestation Form agents can sign to submit with each application.
I just recently added the Attestation Form that should be submitted to the insurance company with each FIA application.
Don’t lose your ability to sell the best products!
Compliance is a pain. It’s way easier to blow it off than to do it. You might get away with it for a while, but why take the chance?
Do the right thing and comply with 84-24!
With the forms I created online, it’s a piece of cake to fill them out and use them for each client.
Roccy DeFrancesco, JD