For the future, he’s a sticking with his recommendation that clients get advice from multiple independent sources.

Still, the DOL ruling has its detractors. “Does the annuity industry need to be cleaned up? Absolutely,” says Stan Haithcock, also known as “Stan The Annuity Man,” in Ponte Vedra Beach, Fla. But to him, the new ruling is tantamount to government overreach—suspiciously timed to be codified before the presidential election. “It started with a great idea, but by the time it got out it’s a bad idea, and consumers are going to lose,” he says.

The BICs, says Haithcock, won’t be “worth the paper they’re printed on,” because signing an understanding of best interests doesn’t guarantee that it’s so. Moreover, before the new rule goes into effect in 2018, Haithcock is convinced “they are going to start bolting things onto it. … It’s a cumbersome law that’s going to grow and grow until it’s impossible to understand and implement. This is a big win for the lawyers.” He foresees lawsuits as the government tries to “seize control of the retirement-advice industry.”

Haithcock believes that fixed annuities may yet be subject to a kind of contract like the BIC, but concedes that the current information does not make this clear. Time will tell. “I don’t think the annuity world is going to be affected now, but it will be,” he says. “This is going to completely disrupt and permanently change the distribution model for annuities and the design of annuities. I don’t know if the industry really gets that. This is a wake-up call. If they don’t respond in unison, then they get what they deserve.”

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