Annuity FYI Visitor Blog

In the Investment News article “Eight big changes that will reshape the annuity biz,” Darla Mercado summarizes a report from Jack Marrion of Advantage Compendium Ltd.  Fixed annuities will see their largest sales ever in the next ten years because of the 58 million Americans nearing retirement will be more receptive to the product’s value.  The 1st change we’ll see in the next ten years is a drop off in 1035 exchanges as it becomes more difficult to transfer from one annuity to another.  With the likely passage of Rule 151A classifying annuities as securities, marketing organizations (MOs) will phase out of existence.  The 3rd change will be a takeover by securities regulators ensuring suitability of annuity products.  The MOs that remain will have to have securities connections with broker-dealers or RIAs to stay competitive.

The 5th change that Marrion believes will happen when you compare annuities today and in ten years is that they will be seen much more in pensions as the planners get comfortable with the products.  Next, the way that guaranteed benefits are offered now will be overhauled with new options that are better for investors.  The 7th change is that Wall Street could be a large part of the annuity industry by getting involved through the teaming of investment firms and life insurers.  The final change will likely be a skyrocketing of fixed annuities sales in the next ten years.  As the products and their benefits evolve, Marrion believes that future retirees will be very open to fixed annuities.

The Financial Industry Regulatory Authority (FINRA) will ask the SEC for permission to expand their BrokerCheck system, according to FINRA’s news release “FINRA Proposes Further Expansion of Broker Information Publicly Available Through BrokerCheck.”  The BrokerCheck system allows the public to view records of securities brokers both current and former for free.  The proposed changes would increase the amount of complaints that are publicly available.  It would also make the records of brokers that left the industry available for ten years, up from the two years currently available.  Information regarding any criminal convictions and certain lawsuits would actually be permanently available.

Wise consumers compare annuities before making their investments.  Now it can be easier to compare the brokers who sell annuities to consumers.  Unfortunately, shady brokers who have been forced to leave the industry have shown up in other facets of finance looking to do harm.  They have been involved in fraud and other forms of misconduct related to finance.  FINRA wants to get rid of these former brokers for good, but as wise consumers we need to use FINRA’s free online BrokerCheck service for it to be effective.  Before you purchase annuities or make other financial investments, check your broker out online and make sure that they have a moral financial record.

From the Financial Industry Regulatory Authority (FINRA)’s news release, the “FINRA Investor Education Foundation and the American Library Association Announce $1.5 Million in Grants to Public Libraries to Support Grassroots Financial Literacy.”  There are 19 libraries receiving the $1,522,122 through the program ‘Smart investing@your library’.  Providing the public with financial education information is the program’s goal.  This is the third year for ’smart investing@your library’, whose goal is to help library patrons with small and large financial decisions free of bias.

The library programs implemented with grant money are meant to help all ages of people, from youth just learning about money to senior citizens looking to compare annuities for retirement.  They also target low-income citizens and immigrants that are new to America with education programs.  The education programs include online learning, teaching in classrooms, individual clinics, and other online educational activities.  Libraries receiving these grants also partner up with other organizations to extend community education even further.  This includes schools, colleges, local government, and veterans clubs.

Grants are not only given in urban communities but also suburban and rural areas as well.  People often turn to free services like libraries when they are struggling economically.  With grants from FINRA and the ALA, libraries can better serve and educate these citizens about their finances and help to either get or keep them on track.  Whether they need information on annuities, credit cards, saving for college, or just budgeting; ’smart investing@your library’ is there to help and educate.

FINRA released survey results detailing the financial habits of American adults, according to their news release “FINRA Foundation Releases Inaugural Financial Capability Survey.”  The FINRA Investor Education Foundation was researching the ways that Americans spend, save, borrow, and plan out their future finances.  This National Financial Capability Survey was completed by FINRA, the U.S. Department of the Treasury, and the President’s Advisory Council on Financial Literacy.  The leaders of all three institutions met at the U.S. Treasury with some high school students to discuss the results.

With an unknown financial future as a reality for many Americans, results showed that many need more education to compare annuities with other financial products and solutions to retirement.  More than half of Americans do not have money saved for their children’s education.  Over twenty percent use methods like payday loan centers and pawn shops regularly for borrowing money.  Most Americans don’t have an emergency fund for financial emergencies.  Only forty-six percent of those surveyed were able to correctly answer two basic questions about inflation and interest rates.  FINRA believes that more financial education is a necessity for Americans.

The FINRA Foundation is funding thirty-one new grants to provide financial education throughout communities that is unbiased and that works.  A partnership with United Way Worldwide will seek out low- and middle-income Americans that need this education to be on successful financial paths.  FINRA is also expanding the Smart investing@ your library program.  Through a partnership with the American Library Association, this program reaches twenty-three million Americans throughout twenty-six states.  These financial education programs are important to FINRA and the U.S. government so that financial mistakes from the past are not repeated in the future.

The Financial Industry Regulatory Authority (FINRA) released a news story titled “FINRA Wins Okay for Major Expansion of BrokerCheck, Will Permanently Disclose Disciplinary Actions Against Former Brokers.”  The SEC approval of FINRA having a permanent record of any broker misdeeds really helps investors get the best protection.  The previous system absolved a broker’s record two years after they left the securities industry, making it no longer available to the public or under FINRA’s jurisdiction.  But as of the 30th of November, former brokers records are available on BrokerCheck, FINRA’s free online system that allows investors to research the employment history, qualifications, and past disciplinary action of brokers.

While you may think that if a broker is no longer in the securities industry, investors would have no need to see their previous disciplinary history, that is not the case.  Brokers that FINRA has barred in the past have been found committing fraud in other sectors of the financial industry, costing millions of dollars to investors.  Investors looking to compare annuities and other investment products want a reputable broker.  By using FINRA’s BrokerCheck system, investors are much more protected against the small percentage of fraudulent brokers out there.  Last year alone there were over 11.6 million broker reviews done through the system.  Not only can BrokerCheck disclose negative hits on a broker, it also helps investors find brokers with high qualifications and certifications.  The system is meant solely for investor protection.