Pesky commissions aside, the insurance industry is quickly and somewhat quietly blending into the larger realm of the securities markets, at least from a regulatory perspective.
That was among the takeaways Wednesday in Las Vegas during the opening session of the Carson Group’s Excell conference.
“What’s happening in the regulatory marketplace is Wall Street and Main Street are continuing to come together,” said Ron Barrett, senior vice president of annuity distribution at F&G. “Regulation is pulling annuities into a fiduciary landscape.”
As fee-based advisory services continue to dominate the wealth management industry, the commission-heavy insurance industry is taking notice and trying to react accordingly.
After posing the question of whether insurance and securities “will be viewed exactly the same at some point,” Barrett added that advisers need to be thinking along those lines.
“That’s one area I see changing and changing very quickly,” he said, before slipping in a pitch for the “importance of strategic partnerships” with insurance product providers.
“You cannot be an expert in everything,” Barrett told the audience. “Between strategic partnerships and the regulatory environment, a new holistic view is occurring inside the platform.”
In terms of fee-based options for insurance products, Barrett recognized the need, but said progress has been sluggish.
“We recognize that there is the need we have to fulfill for you,” he said. “You see other carriers moving there, but the adoption rate is slower than anticipated.”
Dylan Tyson, president of Prudential Retirement Strategies, also acknowledged the need for the insurance industry to migrate toward fee-based models but said it was more complex than just placing commission-based products on fee-based platforms.
“To be able to serve customer needs, we really need to look at building something from ground up,” Tyson said. “You’ll see us continue to look at how we do things that fit well for customers. Over time, fee-based and fee-only will become more dominant.”
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Andrew is half-human, half-gamer. He’s also a science fiction author writing for BleeBot.