July 17, 2008
I have been in the Financial Services Industry for 9 years now following college. I have had all types of mentors and colleagues in the business. I have learned that no matter how a product is regulated there are those in my business who will abuse their fiduciary responsibilities regardless of regulatory concerns. I think the matter is purely a Character question. I have come across the 75 year old retiree who now has all his money into a 17 year surrender charged product with no real understanding of how the annuity actually works and no concept of the penalty it will cost to exit. I operate as both a Registered Investment Advisor and an Insurance Agent. To me the the problem at its core is purely abusive sales tactics not with the product. I don't see how this resolution will fix the bad apples by forcing them to wield a new license, in which that may cause even more damage. The only way to fix the problem is to punish those abusing their obligations and set a standard of non tolerance. Anything else does not fix the real moral hazard and will be nothing but a wet band-aid.