(This is the second part of Kevin Startt’s article, the first part of which can be found online at: www.seniormarketadvisor.com).
In the three years that have followed FINRA’s Notice to Members 05-50, which called for Broker-dealers to supervise the sale of fixed index annuities, the world has changed, indeed.
The Wall Street Journal featured an article on April 29, 2008, that emphasized the financial sector’s influence on the American economy may have peaked at about 27 percent of S&P capitalization. Yet the independent channel of distribution continues to grow at a rapid clip, and could be the major benefactor of the wealth wave. Independent broker-dealers that are armed with an array of diversified safe money choices are in a prime position to capture aging Boomers’ savings and investment dollars. These B/Ds, who have seen four bear markets in 25 years, know that long term retirement money will only stick in managed accounts during an inevitable secular bear market with consistent advisor communication, prudent allocation, and legacy planning.
As one major B/D executive recently said, “we realize that we have got to get it right on the distribution phase for our clients or the accumulation phase means nothing.” Another way of looking at it is the story of a young golfer who is told by his grandfather that when he was his age, he would have hit a shot right over the tree, but forgets to share the fact that the tree was only six feet tall forty years ago.