Ethical Considerations in Annuity Sales to Seniors
Ethical Considerations in
Annuity Sales to Seniors
National American University
TABLE OF CONTENTS
A. Abstract B. Introduction - Thesis C. Definitions i. Annuities ii. Fiduciary responsibility D. The specialty of the senior market E. The evolution of ethical issues surrounding sales to seniors F. The Government’s Involvement in the Problem G. In general, when is selling these products to seniors inappropriate? H. In general, when is selling these products to seniors appropriate? I. Using annuities correctly and ethically J. Conclusion
Abstract
This paper brings to light the ongoing problem of ethical consideration when a licensed agent is selling a life annuity to a senior. The problem of ethical decision making, especially in regard to sales commissions made, is not a new one. A sales person’s greed and desire to meet production or income goals can often override better judgment and allow an advisor to push a client to buy a product that is completely unsuitable for them. On the other hand, there are times when the demographic information may suggest the product is not suitable, but the objective of the customer is such that the product is the best fit. In this paper, we will examine both sides of this dilemma, revealing the opposing views and the laws put in place to guide both the advisor and the consumer.
Introduction
The career of a financial professional can be incredibly rewarding. Helping friends, family and clients determine the best way to invest their life savings to yield the maximum return while at the same time planning for future goals and dreams, is extremely satisfying. As with anything in life, however, where there are positives, there will also be negatives. Part of what makes the role of financial advisor challenging, is the aspect of commissionable sales and appropriate business ethics. In many cases, the financial professional only makes money when a product is
Annuity Sales to Seniors
National American University
TABLE OF CONTENTS
A. Abstract B. Introduction - Thesis C. Definitions i. Annuities ii. Fiduciary responsibility D. The specialty of the senior market E. The evolution of ethical issues surrounding sales to seniors F. The Government’s Involvement in the Problem G. In general, when is selling these products to seniors inappropriate? H. In general, when is selling these products to seniors appropriate? I. Using annuities correctly and ethically J. Conclusion
Abstract
This paper brings to light the ongoing problem of ethical consideration when a licensed agent is selling a life annuity to a senior. The problem of ethical decision making, especially in regard to sales commissions made, is not a new one. A sales person’s greed and desire to meet production or income goals can often override better judgment and allow an advisor to push a client to buy a product that is completely unsuitable for them. On the other hand, there are times when the demographic information may suggest the product is not suitable, but the objective of the customer is such that the product is the best fit. In this paper, we will examine both sides of this dilemma, revealing the opposing views and the laws put in place to guide both the advisor and the consumer.
Introduction
The career of a financial professional can be incredibly rewarding. Helping friends, family and clients determine the best way to invest their life savings to yield the maximum return while at the same time planning for future goals and dreams, is extremely satisfying. As with anything in life, however, where there are positives, there will also be negatives. Part of what makes the role of financial advisor challenging, is the aspect of commissionable sales and appropriate business ethics. In many cases, the financial professional only makes money when a product is
References: "Annuity 4 Hour Course." CA Online Insurance CE Affordable Educators. Affordable Educators, n.d. Web. 22 July 2012. <http://www.ceclass.com/CE-194%20ANNUITY%204HR.pdf>. Wikipedia. N.p., n.d. Wikipedia. Web. 22 July 2012. Oviatt, F. C. "Economic place of insurance and its relation to society" in American Academy of Political and Social Science; National American Woman Suffrage Association Collection (Library of Congress) (1905). Annals of the American Academy of Political and Social Science. XXVI. Published by A.L. Hummel for the American Academy of Political and Social Science. pp. 181–191. Retrieved 22 July 2012. "Consumer Alert: Suitable Annuities for Senior Citizens." Oregon.gov. Dept of Consumer & Bus Svcs Consumer Advocacy, Oct. 2007. Web. 22 July 2012. <http://www.cbs.state.or.us/ins/publications/consumer/3494.pdf>. Morgenson, Gretchen. "Who 's Preying on Your Grandparents?" The New York Times May 2005. Web. 22 July 2012. "Consumer Alert: Annuities and Senior Citizens Senior Citizens Should Be Aware Of Deceptive Sales Practices When Purchasing Annuities." National Association of Insurance Commissioners. National Association of Insurance Commissioners, n.d. Web. 22 July 2012. <http://www.naic.org/documents/consumer_alert_annuities_senior_citizens.htm>. "Obeying the (Ethical) Rules - Keeping Out of Trouble with Life and Annuity Marketing." Online Insurance Education, n.d. Web. 22 July 2012. <http://www.myceisonline.com/courses/obeyingEthicalRules/Book/01.html>.