Professional Ethics Become Increasingly Important as Attacks on Indexed Annuities Continue

I read, with interest, an article in the 2/5/2006 USA Today Online, entitled Financial scams expected to boom as boomers age, by Kathy Chu. Her article was filled with some of the same rhetorically misleading statements that we are used to hearing from a press, which, thoughtlessly aids and abets the propaganda campaign against indexed annuities, which is being waged, regularly, in the media, by the NASD. This article wrongly insinuated, that, seminar selling is a deceitful method of promoting your financial services; that indexed annuities are high costs; the familiar statement that the existence of surrender charges in an annuity alone makes indexed annuities unsuitable for people over 60; and, mistakenly referred to indexed annuities and variable annuities as if they were the same product. At the same time, Kathy’s point, that fraudulent sales practices are likely to increase, as the size of the retirement pot explodes in the coming decade, is a possibility we cannot avoid addressing. Whether your corner of the senior market is only focused on long term care insurance, Medicare supplement policies, estate planning, annuities, or you offer complete financial planning, ethics in the marketplace must begin with each individual offering services to the public. The attack on indexed annuities we are now experiencing may have happened regardless, but when one single agent steps over the line, and selfishly uses unscrupulous sales practices, it hurts everyone. Even if we all agree that the products we are recommending are sound, and indexed annuities survive this current attack, I encourage you to review your marketing methods for the highest level of integrity. Don’t just think that if you are using approved sales material you are doing a good job of communicating the details of your recommendations to your prospects. Omission of important information is just as wrong as offering false or misleading information. As the competition among advisors for this growing pot of retirement money really starts to heat up, I hope you pursue the development of your professional skills and reputation as your means to increase production, rather than employing some questionable slick marketing program that promises to double and triple your stagnant income in the coming year. Fortunately, the market eventually flushes away the bad seeds, but in this lucrative environment, it could take some time, and, it also could wash away bystanders who are simply standing too close to the offenders, or sitting on the fence of their ethical sales practices. Define yourself by your associations. There are unbiased professional designations that have public recognition as a standard of excellence. I recommend that if you want to flourish in this senior market for the foreseeable future, your business plan must include securing one or more of these highly regarded designations to increase your knowledge, define your principles, and distinguish yourself among your competition.