Life Insurers Admit To Offering ‘Kickbacks,’ Says Elizabeth Warren

4-10% commissions will tempt the most ethical advisor to sell annuities. If these damn things were so great, they wouldn't need such an incentive to sell. There is a place for this product but its value needs to be determined by what the client needs and the advisor/broker/agent. Fiduciary?, I don't think so, is the question for the majority of these sales. Leon

How many broker dealer's offer trips to their Advisors? How many qualify for mutual fund sales? I know In the past when working for a major broker dealer I qualified for a trip based on being one of the top mutual funds sales people within the firm during a spedified period.

Of course, the whole concept of compensation is part of this discussion. Salaried vs commissioned with incentives The potential for conflicts of interest with commissions (Looking for the best commissions and bonuses and not looking out for the best interests of clients) is what Senator Warren is saying. Certainly, the trend towards salaried financial advisors is with us and many neutral advice is suggesting to consumers to look for fee types of services. This is obviously a threat to commission people. So who is right? That depends.

I don't think that Elizabeth Warren would work as a U.S. Senator if she didn't make some amount of income. Also, if small or medium asset size retirement savers are not served by fixed index annuity experts because of proposed DOL Rules that go into effect, these modest savers who will be cast adrift should feel free to call upon Ellzabeth Warren and DOL Secretary Perez to start paying them lifetime income when they retire. Frank P, CLU, ChFC

Thomas wrote, "Or do they perhaps research and carefully recommend product solutions appropriate to their valued clientele's needs?" Exactly. PERHAPS they do as you suggest. Many do, some don't. RIAs work under the Fiduciary banner, annuity agents do not, and surely some number of them are in fact more interested in the bonus (cash, trip, whatever) than in their clients' best interest. And when that happens, it hurts the client and tarnishes all of us in the financial field. Sen. Warren is correct to at least raise the issue. Once the investigation gets underway, all sides will have the opportunity to present their views of the issues involved.

Excellent reply Thomas. There was no suitability concerns that I saw expressed in the article, only that someone got paid. Last time I looked America was about $19T in debt and it wasn't insurance agents that got the country there. Maybe there are some elected officials "peddling" their votes. Hey, FA mag and FA's, why are you always attacking the insurance industry? How much money have your clients lost in your career? And I don't mean to commissions, fees, and trails, although that's another discussion. How much have you lost them in their portfolios? I don't know how you sleep at night. In '08 you lost billions for Americans and yet you STILL charged them management fees! Why? Because if you put them into MM funds like you should have before the rout was on you don't get paid.

Senator Warren is clearly confused. She confuses and conflates a bonus as some sort of "kickback". When she was a Professor at Hahvahd, did that institution ever reward prospective students with bigger tuition bonuses or "kickbacks" from the Endowment Fund by offering more money than say Yale? And, did Hahvahd employees ever receive extra bonuses or compensation for snagging 35-36 ACT score students in competitive enrollment situations? And if one annuity company pays a 2% commission compared to another annuity company which pays 4%, is it a "kickback" if the 2% company offers a bonus to reward high premium production thresholds, offsetting their initially lower 2% comp? Finally, do Advisors merely "peddle" products to their clients? Or do they perhaps research and carefully recommend product solutions appropriate to their valued clientele's needs? Perhaps this Senator of admittedly false narrative-high cheek bone descent, can more aptly explain her poor and biased word choice, to us. As it stands today, she is appalling biased, ignorant, and confused.