Prepare Your Business for the Coming Changes
MESSAGE FROM NAFA
The DOL rule is still being reviewed by the OMB (Office of Management and Budget) as this issue goes to press, but as proposed, it offers many more questions than answers regarding changes it will bring to the insurance and financial services business. These proposed changes will have a tremendous effect on all aspects of our industry and every arm of distribution. Insurance carriers, marketing organizations, broker-dealers, registered reps and insurance agents alike will have to adapt to a new set of rules and regulations when conducting business.
In addition, the unintended consequences of the DOL rule may leave millions of Americans bereft of much-needed education and financial advice regarding their retirement accounts due to the onerous guidelines that will be imposed.
Many years ago, Thomas Watson Sr., founder of IBM, coined the phrase, “Nothing happens until a sale is made.” From real estate to the car business and furniture sales to the sale of financial or insurance products, it’s true that every company must sell something to exist and no one gets paid unless sales are made. In our business, we’ve always had to recruit, retain and incentivize sales people to help potential clients make solid financial decisions and better plan for their future. Now, the DOL believes that if you provide incentives (commissions) for sales people, it creates a conflict of interest. DOL has not shared how they plan to regulate these changes going forward, but will instead likely leave that up to the clients and their attorneys. I can only assume that there are meetings going on with trial attorney associations right now to discuss how they are going to handle the tremendous increase in business!
Despite the countless hours our NAFA team and wonderful volunteers have put in to provide feedback and direction to guide the outcome of the rule, we must face the reality that our work is far from done. We will review and analyze the final rule as soon as it is released to determine where we go from here. Meanwhile, it’s crucial we have your support in order to protect our industry’s efforts to continue to provide annuity products to the millions of Americans who need safety and guaranteed income to supplement their retirement.
I encourage our Premier Partners and Supporting Partners alike to register now to join us in Washington, D.C. in June for our Annuity Leadership Forum and Hill Walk. We have a great lineup prepared to continue the DOL conversation and will make our voice heard among our elected officials to continue this fight. Take a few minutes and register today at www.nafameetings.com. Otherwise, stay tuned for much more to come.
Executive Director, NAFA