http://online.wsj.com/article/SB1000142405270230417710457730...It long has been one of the most tightly held secrets in the financial-services world: what your insurance agent is paid.That might be about to change, thanks to a new regulation in New York.Agents and brokers in the state now are required to alert clients, in writing, how they are being compensated, and to provide specific details to clients on request. In March, the rule—which originally took effect in January 2011—survived an appellate-court challenge by an agents' group. </snip>intercst
In the old days when my insurance agent was just selling straight insurance products like home, life, and auto I didn't care what he was being paid. Of course I knew he was getting a commission but I had no reason to believe the amount was unreasonable compared to any other product.Now that agents sell a variety of financial investment products I think customers should know the agent's compensation for their own protection. Is a huge chunk of my investment going straight into the agent's pocket? Does the investment he recommends pay him significantly more than another product he sells, and is that the reason he recommended it? I don't trust any financial advisor who is being compensated to sell me a product to put my interests ahead of his own. Knowing his compensation for various products might actually help me trust him more.
My mom had a financial calculator and knew how to use it - one guy tried to sell her an annuity back in the 80's and she whipped it out and calculated that her first 7 year's returns would go straight into HIS pocket, before she'd even break even. Mom had a way of shocking people who expected her to be just another naive little old lady...
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