Logo

How to make it, spend it, and invest it

6 Aug 2019

New York Implements New Standard for Annuities Sales by Patrick Donachie

Download
Post by MoneyRadio Staff

The amendment to Regulation 187 takes New York state’s oversight of annuities sales a step further than the state’s current “suitability” standard. The amendments were passed last July, with a scheduled phase-in date for Aug. 1.

The new rule will also put new disclosure and training requirements on b/ds and insurers that sell annuities, as well as forbid sellers of annuities from calling themselves advisors unless they are licensed as such.

“A producer shall not use a title or designation of financial planner, financial advisor or similar title unless the producer is properly licensed or certified and actually provides securities or other non-insurance financial services,” according to the rule. “Although a producer may state or imply that a sales recommendation is a component of a financial plan, a producer shall not state or imply to the consumer that a recommendation to enter into a sales transaction is comprehensive financial planning, comprehensive financial advice, investment management or related services unless the producer has a specific certification or professional designation in that area.”

The new regulations are coming into effect after the Securities and Exchange Commission passed their Regulation Best Interest standard last month, while the changes were originally made to address regulatory gaps on the federal level after the U.S. Department of Labor’s Fiduciary Rule was eliminated in March 2018, according to Financial Services Superintendent Maria T. Vullo.

“As the federal government continues to roll back essential financial services regulations, New York once again is leading the way so that consumers who purchase life insurance and annuity products are assured that their financial services providers are acting in their best interest when providing advice,” she said last year. “Given the key role insurance products play in providing financial security to middle class New Yorkers, it is essential that a provider adhere to a high standard of care and only recommend insurance and annuity products that are in the consumer’s best interests and not be influenced by a producer’s financial incentives.”

According to Richard Roth, a founder and partner at The Roth Law Firm, the legislation could potentially be a harbinger of the future path the state Legislature may take.

“I think New York state is essentially getting closer to calling for a fiduciary (standard),” Roth said about the new regulations. “The legislature has determined that this is required, because certain brokers aren’t doing what’s best. They want to add another layer of culpability.”

Several states, including Nevada and New Jersey, have proposed some form of legislative or regulatory fiduciary rules to pertain to all investment advisors and b/ds in their state. Massachusetts announced its own rule shortly after the SEC released Reg BI, arguing that the federal regulatory shortfalls made it necessary for the state to act. Though the New York amendments pertain only to those b/ds selling annuity products, Roth believed the new regulations might inspire other states.

“New York has always been a leader when protecting investors, so I wouldn’t be surprised if some states follow suit,” he said. “It’s only a matter of time before it happens. If a broker is handling my money, they’d better do it in good faith. I think we’re just heading in that direction.”

The regulations will take effect for providers selling life insurance policies on Feb. 1, 2020.

https://www.wealthmanagement.com/regulation-compliance/new-york-implements-new-standard-annuities-sales

This article is suggested reading by Secured Financial Services, LLC and President and Chief Executive Officer of Secured Financial Solutions, LLC, Anil Vazirani. Please visit https://secured-financial-solutions.com/

Retire and Stay Retired Safe! Smart! Secure!

Based in Scottsdale, Arizona, Secured Financial Solutions is one of the leading financial service firms in Arizona, catering to the financial planning needs of retirees and pre-retirees.

One of the benefits you can count on when working with one of our financial advisors is an outstanding personal relationship with an advisor. As a client, you will deal directly with a financial advisor who will take the time to understand your situation, objectives, estate planning, and retirement planning needs as well as your risk tolerance. We work directly with other advisors as well as CPAs, attorneys and trustees, to ensure that the investments we make will align with your estate plans, and that you are not faced with heavy tax burdens.

You can expect Secured Financial Solutions to develop comprehensive solutions to your complex wealth management and estate planning needs. Our one-on-one approach helps you achieve your financial planning goals, including maximizing your estate, retirement planning, minimizing your tax obligation, and continuing your family legacy. Our investment advisors will work with your CPA, attorneys, and other trusted professionals to help you make intelligent choices that align with your financial and personal goals.

This article is suggested reading by Secured Financial Services, LLC and President and Chief Executive Officer of Secured Financial Solutions, LLC, Anil Vazirani. Please visit https://secured-financial-solutions.com/

Retire and Stay Retired Safe! Smart! Secure!

Based in Scottsdale, Arizona, Secured Financial Solutions is one of the leading financial service firms in Arizona, catering to the financial planning needs of retirees and pre-retirees.

One of the benefits you can count on when working with one of our financial advisors is an outstanding personal relationship with an advisor. As a client, you will deal directly with a financial advisor who will take the time to understand your situation, objectives, estate planning, and retirement planning needs as well as your risk tolerance. We work directly with other advisors as well as CPAs, attorneys and trustees, to ensure that the investments we make will align with your estate plans and that you are not faced with heavy tax burdens.

You can expect Secured Financial Solutions to develop comprehensive solutions to your complex wealth management and estate planning needs. Our one-on-one approach helps you achieve your financial planning goals, including maximizing your estate, retirement planning, minimizing your tax obligation, and continuing your family legacy. Our investment advisors will work with your CPA, attorneys, and other trusted professionals to help you make intelligent choices that align with your financial and personal goals.