Department of Labor Actions

The Department of Labor (DOL) actions relative to any qualified plan and related products has now come to fruition. While they have seemed to have tempered the final regulation, the impact could be significant for anyone who has retirement plans in their book of business or is currently writing business in the arena. Flattened commission structures could be the norm depending on how BD’s and carriers move forward. It may take as many as 4 to 5 years for an advisor to make up the lost revenue.  Will you or your Broker-Dealer be able to sustain the revenue shortfall during this time frame? And even after full implementation, the impending changes may not be sufficient to satisfy the hungry giant!

In fact, it has been said behind a many a closed doors, that this is the first step in the Federal government’s (the hungry giant) attempts to fully control the retirement assets of America. Prediction, assumption or fact, I know not. But it is not impossible from the perspective of many.

Now let’s add to the DOL actions the health care debacle under the Affordable Care Act (ACA or Obamacare) (both of these were directed the current White House administration). We have witnessed rising health care premiums along with the reduction of commissions or the elimination of them. Carriers have left the market or will be unable to remain in it. Only the very strong will survive…maybe… but as I already alluded to, the giant is hungry. Very Hungry!!! In some circles, it has been said is that the ultimate objective of the federal government is to completely nationalize healthcare. Obviously a method of taxation would be engaged to take the place of the current insurance premiums. Again lost revenue for financial advisors but big revenue for Uncle Sam.

The future is clearly unknown. But there is rumbling in the streets and neither scenario is completely out of the question. So for those of us in the financial services business we should be at least pondering our future. It maybe that retirement planning compensation and health insurance revenue will be a thing of the past. Like Sony beta machines. So what is left for us? Non-qualified investment dollars? Seems so. So then the question is what percent of your business is non-qualified and can the revenue generated from it sustain you?

Is there another option to consider that would add to your services and income stream. My thoughts lead me to serving our clients in the good old fashion way. It is simply assessing our clients Risk Management and Wealth Accumulation needs and determine if  a product called Life Insurance is appropriate. It has its place and it may be in your future and mine more predominately than ever before.

So from my perspective, a potential survivor guide is to consider the life insurance business, increase your non-qualified book of business and buy books of business that have a lot of non-qualified assets.

John Ruggiero

Chief Marketing Officer


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