A broker acts as the intermediary or middleman between a buyer and a seller and earns a commission from the transaction. There are brokers in just about any kind of business – real estate, mortgage, insurance, bonds, stock market, customs, commodities, foreign exchange, etc. In the stock market, the broker is the link between the investor and the stock exchange. Brokers as a rule have to sit for exams to earn a license in order to solicit business, offer any advice and transact on your behalf.

Types of Financial Advisors

Fee Only Advisor

Long Term Care 1035 Exchanges Developing Slowly

A provision of the Pension and Protection Act of 2006 went into effect this past January first which allows for a tax-free exchange (a Section 1035 exchange ) of annuities for long term care coverage. However, Investment News reports that there has been very little of this type of activity since the first of the year.

New Rules for Fixed Annuity Suitability

The National Association of Insurance Commissioners (NAIC) has adopted an amendment that will affect the processes involved in determining the suitability of fixed annuity sales. Much of the supervisory responsibility for fixed annuity suitability will be shifted towards the insurance company . Broker-dealers will likely receive much of their guidelines, materials and recommendations from insurance companies. The result is an increase in compliance burden which will likely have the greatest...

Keeping an Eye on Fiduciary Status

The proposed regulation that could expand fiduciary status to a broader set of financial advisors appears to be pending in Congress.

The Dodd version from the Senate Banking Committee would potentially extend fiduciary status to broker-dealers and registered representatives.  Broker-dealers are currently exempt from the Investment Advisers Act which defines fiduciary status.

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Life Insurers Suing Broker Dealers Over Sale of Variable Annuities to Terminally Ill Annuitants

Investment News reports that two life insurance companies are suing a handful of broker dealers over the sale of variable annuities to terminally ill annuitants. The suit involves a Rhode Island-based attorney who allegedly solicited terminally ill people through advertising and an offer of $2,000 per variable annuity purchase.
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