Thomas R. Kestler, CFP®, CLU®, ChFC®, CMFC®, CSA®

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401(k) Rollovers: A Legal Liability?

Did you know that, as a licensed insurance agent, you could be breaking the law by transferring funds from a 401(k) into a fixed or fixed-index annuity?

If the 401(k) was invested in securities, you could potentially be in hot water because the SEC prohibits unregistered individuals from giving investment advice. In practice, however, the SEC rarely pursues unregistered individuals. FINRA, with its focus on broker/dealers and their registered reps, has little time to oversee insurance-only agents. This type of enforcement tends to be left up to each individual state’s insurance department.

Several states have laid out specific regulations as to what advice can be provided by an insurance-only individual. Conversations around risk tolerance, goals, and general asset allocation are fine. But making recommendation to liquidate securities or which specific security to liquidate are considered investment advice and are illegal unless you are appropriately licensed.

The same rules apply to any other qualified plan rollover, annuity replacement, or brokerage account/mutual fund liquidation.


The Top 5 Questions to Ask About a Living Benefit Rider

Annuities have always been the only financial instruments that can provide an income that cannot be outlived. Historically, this meant annuitizing the contract — exchanging the lump sum account value for a guaranteed series of payments for a specified period or life.  The thought of forfeiting principal for income, however, was unpleasant to most consumers and therefore annuitization was rarely used.

Living benefits — often called income riders — first appeared on variable annuity contracts to provide a “safety net” in the event the underlying accounts did not perform as hoped. Today, living benefits are available on all types of annuities.


Tortoise vs. Hare: 3 Reasons Why Fixed Income Annuities Win the Investment Race

Tortoise and Hare Race

People love get-rich-quick schemes, from the Tulip craze of 1637 and Bernie Madoff, to lottery fever and Bitcoin. There’s only one problem: substantial research shows that slow and steady wins the race.

For example, in a recent paper by Barclays and co-authored by Dr. Robert Shiller entitled “Investment Characteristics of FIAs,” the authors uncovered three remarkable trends regarding long-term investing.


8 Reasons to Break Up Big Annuity Contracts into Bite-Sized Ones

8 Reasons to Break Up Big Annuity Contracts into Bite-Sized Ones

Do you have a client who is considering a potentially large annuity purchase? If so, you may want to consider the benefits of breaking up the big contract into smaller, bite-sized ones instead. Here’s why.