October 27, 2010
As a registered representative at Northwestern Mutual Investment Services I have made some observations over the past 29 years. Service to policyholders/investors is not a driving force in the marketplace. Commissions are. I receive inducements almost daily to sell annuities and other financial products. The inducement is not the quality of the company or the quality of the product but a ridiculously high commission rate. These rates are 3-4 times higher than my commissions at the Northwestern. Most of these products have no renewal/trail fees. Todays marketplace is rife with agents/representatives who have little or no interest or incentive to service their clients. The SEC should focus on incentivizing service. If all an agent cares about is making a sale, then why have an agent at all? Is our business about transactions or relationships? What kind of a marketplace is the SEC attempting to foster?
The problem in the marketplace is not competition. The problem is a lack of ethics and greed. This is the same problem that caused the crash in 2008 and the lost confidence in the financial services industry.
John C. Chiodini, CLTC