Are Best Interest Regulations Cramping Your Firms Business?

If you’re in the annuity business, the onslaught of new rulings could make you feel like you’re tiptoeing on thin ice while carrying a sack of boulders. And if that’s you, you’re not alone.

With the emergence of Regulation Best Interest (Reg BI), the National Association of Insurance Commissioners (NAIC) model regulation, New York’s regulation 187, and a new presidential administration looking to add even more rules, the entire industry is on edge and wondering, “How do we keep up with or even address this?”

For everyone involved, from advisors to the firms they represent, the situation is a paperwork nightmare. And it even has some independent advisors leaving annuities altogether.

Fortunately, though, several fintech companies have been working on solutions to ease the impending regulatory chokehold. One firm in particular, CapitalRock, unveiled a tool that is so effective, modular, versatile, easy to use and powerful that it’s already been implemented by more than half of the largest broker/dealers in the country.

No stranger to the fintech market, CapitalRock has been developing software to help make the lives of advisors, financial institutions and broker/dealers easier since 2007, with their Product Profiler that helps determine what category of product is best for a client, given their current needs and goals, before ever looking at a specific item. It also includes Rollover Wizard to determine whether a rollover is in fact in the best interest of a client.

This time, they created what might be considered the knight in shining armor in today’s suitability climate.

It’s called Annuity Wizard — and it’s a one-of-a-kind platform that is customizable to a firm’s own unique product lineup, state and way of doing business that streamlines the product selection process and level of suitability and even offers reasonable alternatives while remaining inside the new regulatory rulings. Producers with access to it can focus more on their clients and less on incidental repercussive actions.

Even more important, Annuity Wizard appears to be the most effective safeguard to keep producers in all 50 states compliant because it works with all types of annuities, including variable, variable index, structured, fixed, fixed indexed and more!

According to one of the founders and the COO of CapitalRock, Brian Hendricks, “We only expect a ramp-up of regulations. And that means it is only going to get harder for financial professionals to remain compliant. We also know that financial advisors generally don’t like adopting new technology. So what we wanted to do is create a tool that helps them remain compliant and also makes the entire process easier for everyone to follow and understand.”

Easier might be an understatement. It could even offer producers using it a major competitive advantage.

“Regardless of whether you’re looking at NAIC or Reg BI, one of the rulings expected is that an advisor knows the details behind and understands the nuances of every product he or she can offer — whether they like them or not. If you’re working with a firm that offers more than a couple of products or annuities aren’t the main part of your business, you’ll spend all of your time learning and have none left to sell,” Hendricks continued.

While some fintech solutions offer product comparisons and others include rate tools that advisors could use after selecting products themselves, Annuity Wizard starts with regulations and product suitability in mind. The platform narrows down the product selection for advisors based on the client’s needs.

And that’s just the beginning.

Knowing the temperament of many financial advisors and their understandable desire to keep the human element in the decision-making process, Annuity Wizard is designed to operate in two modes — product selection and product validation.

Rather than allowing the platform to select the best option for a client, advisors working in validation mode still retain control of the products recommended and afterward can check the suitability of their decision to make sure what they are proposing is compliant, and – most important – if it’s not, what a few secondary options for clients to choose from are.

Regardless of which mode Annuity Wizard is utilized, the two final perks are among the most beneficial to those using it: a one-page questionnaire and autogenerated suitability documentation.

“What you want to do when you’re releasing any new piece of technology to combat an already frustrating regulation is make what you’re releasing easy for someone to use. The Annuity Wizard is a one-page questionnaire that contains information about the client. All an advisor has to fill out is one sheet,” Hendricks explains. “From there, the program can validate or select a product along with reasonable alternatives. It automatically takes care of note taking and the justification of a product.”

In other words, Annuity Wizard simplifies the selling process for an advisor and the buying process for a client and gives both of them confidence in knowing the decisions are checked against the latest regulatory and best-interest standards.

“We do all of that on one platform. That, by the way, also includes an estimated income calculation based on the guaranteed income that those products can provide, which is huge. If you are trying to select a product to provide the best income for your client, our tool does that and that is unique,” Hendricks added.

The power, confidence, ease of use and versatility that Annuity Wizard provides to companies and the advisors adopting it appears to be second to none and explains why more than half of the largest broker dealers and firms working in the annuity space have already implemented it.

Who is this game-changing platform best suited for?

According to Hendricks, Annuity Wizard more than pays for itself when a firm, be it an IMO, an FMO or a broker/dealer, has as few as 100 advisors using it. But outfits as small as 20, with a primary focus in annuities, will benefit almost immediately.

From a compliance standpoint, Annuity Wizard covers all the bases and even helps make placing more business easier for all parties involved.

For more information on Annuity Wizard or to schedule a free demo to see for yourself whether it could benefit your firm, click here now.