Steve Bailey, a registered investment rep at HB Financial Resources, the Charlotte, N.C., firm he founded, spoke with Senior Market Advisor recently on regulatory issues. Below are highlights from that conversation.

“Right now, we are over-complianced. I’m concerned that will hurt our ability to provide creative, custom solutions for clients at a time when they need them most. Basically, we’ll just be order-takers, not true advisors.”

  • Portray products even-handedly when discussing variable annuities with clients. “We make a point of telling them up-front the pros and cons of each product,” explains Bailey. “We would rather lose a sale early in the process than have a client come back later with complaints” about an annuity they purchased, he says.
  • Be transparent about fees and commissions. “We tell people exactly what we make” on an annuity contract, says Bailey, “and show them exactly what we are doing to earn that commission.”
  • Be clear in client communications and document them diligently. “Everything we do now [with regard to client communications involving variable annuities], I don’t care what it is, is sent to compliance first for review,” says Bailey. Lately he’s been encouraging his advisors, when communicating with specific clients about variable annuities, to use the phone instead of e-mail, because “e-mail can be misconstrued and confusing.”