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Regulation and Compliance > State Regulation

An insider's view: Craig Randall

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For the initial issue of our newest eNewsletter, Market Conduct & Suitability, Senior Market Advisor editor Daniel D. Williams spoke with Craig Randall of Randall Marketing Group and 2007 Senior Market Advisor‘s Advisor of the Year to get his thoughts on compliance issues and the tighter regulations being implemented in the industry. Following are the highlights.

Senior Market Advisor: What changes are you seeing in the industry?

Craig Randall: There are definitely big shifts in the industry. State regulators are getting so tough … (they) are auditing agent’s books and if they see money moving from a variable to a fixed annuity, and the advisor is insurance-licensed only, then it’s a felony. That is a big change.

SMA: Do you think that’s a good thing?

Randall: First, it’s important to note that compliance is not bad; compliance is our friend, but if you’re insurance only, you will be ‘dinosaured.’ It doesn’t matter if the advisor is giving good advice or bad, if they’re moving money from a variable to fixed, they’re breaking the law.

SMA: What can advisors do?

Randall: Essentially, there are three choices an advisor can make to bring him up to speed. He can become a registered investment advisor, an investment advisor representative or get his Series 6 license.

SMA: How do you see this playing out?

Randall: The whole industry is moving to managed money. First of all, regulators don’t like commissions. So they assume all advisors are commission driven, but there are only a few who are (truly) commission driven. With a securities license, advisors can expand what they do for their clients. They will become more full service. And I believe that’s the way the industry is moving — where you become much more of a full service advisor or you will be pushed out. Ultimately, the full service approach is a win-win for both the advisor and the client.


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