Annuity agents: Get your securities license

In summary, it appears that the insurance agent did what most insurance agents do when selling a fixed indexed annuity (FIA). He informed the client about the product but then had to figure out where the money would come from to fund it. It appears that in the case at hand, the money to fund the annuity would be coming from the sale of a security.

To make a long story short, the DOS in Illinois somehow got this case on their desk and negotiated a consent order with the following amazing terms:

• $10,000 fine
• Forced language that must be used on the insurance agent's website and in the emails he sends. It is truly amazing and scary that the agent agreed to use certain language not only on his website but also in every email he sends. It should scare everyone who reads this.

It is my opinion that all agents eventually will need a securities license in order to sell fixed products. Sad but true.

I believe that the state securities commissions will continue to pursue actions against non-securities licensed agents who are telling clients to move money from mutual funds, stocks, etc., into FIAs, EIULs, or other fixed instruments.

It is for this reason that from a compliance point of view, I believe every non-licensed agent should protect his/her ability to make a living by obtaining a Series 65 and becoming an IAR.

For more from Roccy DeFrancesco, see:

• 4 ways to replace life insurance sales lost due to the fiscal cliff deal
• Are you using the 'best' EIUL policy for your clients?
• College Funding: Life Insurance vs. 529 Plans