Originally Posted by cowgoesMoO
OK, I have to bring up this radio spot that I hear every day.
A group of agents/RIA's advertise on my favorite radio show, and the host of my favorite show even narrates the spot from time to time. it goes something like this:
"are you contributing to a 401k that you know nothing about? Do you know how much you are paying in fees? wouldn't it be nice to have an investment approach that guaranteed that you would never lose a cent? call my guys at BLah Blah investment group. They will come to you and never charge a fee to our listeners. the best part you ask? what if I told you that you could have a guaranteed 12% gain every single year. That's the bare minimum, and in other years even more"
So basically is this legal? These guys are in my market and they are publicly advertising that they can guarantee 12%. I am not kidding here, they flat out say 12% is the bare minimum you can gain in one of their products.
Before they started saying that 12% line I was sure that they were pitching IUL, but since even the most greasy salesman would guarantee an IUL for 12% a year I can only imagine that they are pitching viaticals or something....
They are most likely pitching IA income riders.
Is it legal? That is a grey area. It would depend on what the regulators say. If it is an insurance product they would be regulated by the stat DOI as well as the state securities commission (or the SEC if they hold over $100m in assets).
If they are a hybrid RIA that is affiliated with a BD, then they certainly could be in violation of the BDs compliance regs depending on the BD and how much oversight they demand on the RIA or other affiliated businesses.
Depending on state insurance regs, they could be in violation of advertising guidelines.
Depending on state law, they could be in violation of certain laws about good faith advertising.
If they are advertising as the RIA entity then depending on how they handle the meeting/fact finding/recommendation, then they most likely are in violation of state or federal securities law pertaining to their Fiduciary Duty to clients.
Any way you go about it nothing will be done unless someone complains. But to complain you must be directly affected by the issue.