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.