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An Ounce of Prevention now is Worth a Pound of Arbitration Later…

Thursday, March 29, 2012

Breach of fiduciary duty continues to be the #1 controversy involved in FINRA arbitration cases so far in 2012, followed closely by negligence. Financial Industry Regulatory Authority (FINRA) recently filed a proposal to amend its arbitration procedure to double the limit for simplified arbitration. There has never been a better time to make sure you have a process in place for due diligence of your life insurance product recommendations.

FINRA has already filed proposals for greater transparency for agent/brokers in the industry, even going as far as wanting to post exam grades of registered agents/brokers. With greater transparency as a theme for 2012, along with the prospect of a fiduciary standard definition, give yourself a competitive edge over the others that are non-compliant by already having your documentation in place.

Brad Bennett, FINRA’s Executive Vice President was quoted in a recent article, “If you see products being sold by people who don't understand them to people who don't understand them, that's a supervision and suitability problem,” Mr. Bennett said. “That is a common theme that will underline product cases coming out this year.” He goes on to say, “The cost of doing business incorrectly has to be greater than the cost of doing business correctly, or you give a competitive advantage to a non-compliant firm.”

Add an ounce of prevention with independent research to document your files while at the same time help confirm product suitability for your clients.

Veralytic is simply the fastest, easiest, and most comprehensive and cost-effective way to independently verify to clients and their advisors whether or not the pricing and performance of existing or proposed life insurance is in their best interest.  Only Veralytic is accepted for independent client representation, endorsed by the New York Bankers Association (NYBA) and compliant with industry regulations and established case law.

Use the Veralytic Reports to determine the appropriateness of pricing, the reasonableness of performance expectations for invested assets underlying policy cash values, and overall suitability for your (client’s) policies based on the 5 factors of suitability.  Click here and get up to 3 Veralytic research reports under our NO-Risk trial subscription.

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