Broker-dealers say holding state insurance licenses among multiple jurisdictions is a regulatory obstacle that can lead to diminished retirement income product sales, according to new research by the Insured Retirement Institute.
Another 80 percent of respondents agree state regulations negatively impact annuity sales. Although 46 percent of respondents report they’re interested in selling more annuities, 83 percent of respondents say it would take much more time to sell annuities than other investments.
On average, it takes almost 22 hours per year to complete continuing education requirements and licensing renewals to sell annuities as opposed to fewer than 16 hours for selling securities, the research finds. The research also reveals that seven in 10 respondents say state insurance licensing can be unclear or poorly defined while eight in 10 respondents say state insurance regulations are duplicative.
To help with these restrictions, IRI advocates for implementing a one-stop national licensing clearinghouse for financial professionals working in multiple states. The National Association of Registered Agents and Brokers Reform Act would be responsible for creating this clearinghouse, and the proposition was reintroduced to Congress last week.
“Time spent on redundant licensing requirements is time not spent servicing clients and focusing on their needs,” says Cathy Weatherford, president and CEO of IRI. “The time has come to advance NARAB II. This bipartisan and common-sense legislation promotes the efficient and cost-effective licensing of thousands of financial advisers across the country while maintaining important consumer protections. We urge Congress to support and advance this legislation to establish a streamlined licensing process, and at the same time, retain states’ authority to regulate the marketplace.”