Wednesday, May 17, 2017

Does Your Business Model Fit Your Current Broker/Dealer?

By Nick Bates, Vice President of Annuity Sales

Recently I began the daunting task of starting to look for a new home for my family. My daughter is now almost four years old and the home my wife and I bought as newlyweds does not fit our ever-growing collection of toys, princess dolls, and their accessories. As things in our lives change, we are constantly reevaluating decisions we have made and how we could better improve our situation. This has never been more relevant in our industry than right now if you are with a broker/dealer (B/D).

As regulations force some B/Ds to change the way they do business, when is the last time you reevaluated your current B/D? Does it still fit your current business model? Each B/D has a focus. Some business models are more insurance-driven, or securities-focused, while others focus on comprehensive financial planning, wealth management, or a fee-based model. Because fixed index annuity (FIA) sales continue to grow, an increasing number of registered representatives (RRs) are realizing the value that an FIA may provide to their client portfolios. This, along with changes in regulations, has led many B/Ds to reevaluate how they supervise their RRs selling FIAs.

Many B/Ds that once allowed their RRs to categorize FIAs as an outside business activity are now requiring that FIA business flow through the B/D for approval and supervision, and are haircutting the payout to cover their increased cost. Many B/Ds are also limiting the number of FIA products their RRs can sell, along with limiting which field marketing organizations (FMOs) they can work with.

With all these changes happening at many B/Ds concerning FIAs being sold by RRs, now might be the perfect time to start looking at how your B/D treats FIAs compared to other B/Ds. Ann Arbor Annuity Exchange has relationships with multiple B/Ds that treat FIAs very fairly when it comes to product availability, payout, and the freedom to work with any FMO you choose.

Now, I know what you are thinking: “Moving B/Ds is such a pain”. Well as I stated above, I am considering moving houses and have that exact same thought, but a colleague of mine once said “if you want to move to a better neighborhood you still have to pack the boxes”. I think of this every time I speak with a RR that is hesitant in moving B/Ds. Even though it would help their current business model, the RR just does not want to take the time to pack the boxes.

If you would like to discuss B/D options that are consistent with your business model, please give me a call at 800.321.3924 x121.

Nick Bates | Vice President of Annuity Sales
Ann Arbor Annuity Exchange
Ph: 800.321.3924 x121 | Dir: 734.786.6121

Designed for Financial Professionals.