More On Legal & Compliancefrom The Advisor's Professional Library
- Client Commission Practices and Soft Dollars RIAs should always evaluate whether the products and services they receive from broker-dealers are appropriate. The SEC suggested that an RIAs failure to stay within the scope of the Section 28(e) safe harbor may violate the advisors fiduciary duty to clients, so RIAs must evaluate their soft dollar relationships on a regular basis to ensure they are disclosed properly and that they do not negatively impact the best execution of clients transactions.
- Agency and Principal Transactions In passing Section 206(3) of the Investment Advisers Act, Congress recognized that principal and agency transactions can be harmful to clients. Such transactions create the opportunity for RIAs to engage in self-dealing.
Last week I spent time fulfilling my continuing education requirements. I had to complete 24 hours for my state insurance license by November 30th. Needless to say it was a priority. In this post, I'd like to share a couple of things I learned in the process which could possibly save you time and money.
In Louisiana, to maintain a life and health insurance license, you must complete 24 hours every two years with at least three hours in ethics. As a CFP you need 30 hours every two years with at least two in ethics. My Insurance requirement was due 11-30-2012 and my CFP is due 11-30-2013. Basically, I needed to meet my insurance requirement immediately and my CFP by next year. I found a great online provider which was reasonably priced and easy to use. The firm’s name is WebCE. Even though my immediate need was for insurance, if you sign up to complete CE for your CFP, you can add insurance credit for a only $3 per course.
I took three courses and earned 21 hours for my CFP for a cost of $40. I added $9 ($3 per course) to get credit for insurance and got a total of 28 hours (Louisiana allows more credit per course than the CFP board). For a total of $49, I met all of my insurance requirement and with my prior CFP hours, all I need to do before next November 30th is complete the CFP ethics course.
Here's another thing I learned along the way. Years ago, when I first got my securities and insurance licenses, I also got a variable annuity license with the state. However, as an RIA, I no longer needed my Series 7 and Series 24 license and let them lapse a few years ago. The question now is what to do with my variable annuity license with the state. Should I keep it or let it lapse?
Since my securities licenses lapsed, I assumed I could no longer write any commission-based variable annuity business. The Department of Insurance could not give me a definitive answer on this question.
To be certain, I called two annuity carriers. One was a traditional commissioned VA provider and the other was Jefferson National, the company I have used for some 1035 business. Jeff Nat offers a fee-only VA for RIAs with an extremely low expense structure. Both companies confirmed what I suspected: to write a commissioned VA, you need at least a Series 6 and a state VA license.
Therefore, since I no longer have my securities licenses I don't need my state VA license. This saved me a renewal fee and an additional CE requirement.