retirement outline

Variable annuity fees

·        Death benefit-has an impact on cost

·        Length of time annuity must be held-has an impact on cost

·        Sales charges <8.5% of total payments, paid for with accumulation units in separate account

·        Insurance co. pays broker/dealer commission for selling variable annuity

·        Insurance co. gets spent $ back through separate account fees

·        Level load sales charges, annuitant pays sales charges over the time the $ is invested in annuity

·        Contingent deferred sales charge, penalty charge for ending variable annuity contract early

·        Sales charge period, needs to expire for customers to end contract without penalty

·        Front end sales charge, can’t be>8.5%, investment $ - sales charge is placed in separate account

Variable annuity

·        Security

·        Insurance product

·        Must be registered

·        RR must be licensed in state of sale

Variable annuity contract

·        Security

·        Register with SEC

·        Separate account-register as security

·        Investment Company Act of 1940-separate account must register

·        RR must have Series7 or Series6

The people who sell variable annuities must be registered with which of the following:

·        The state-salesman

·        FINRA-salesman

·        Separate account: state & SEC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

investment companies outline

how to buy mutual funds

• broker/dealers sell shares to investors
• fund sells shares to investors, no-load mutual fund-no sales charge to investor
• investor pays public offering price
• prospectus at offer or time of sale  
• buy wish cash,check, electronic transfer, or sell existing owned mutual funds
• exchange, sell mutual fund and use $ from sale to buy a new mutual fund
• public offering price, POP, based on net asset value
• forward pricing, know cost of mutual fund after buying
• front end sales charge: POP=NAV + sales charge
• no load mutual fund: POP=NAV
• deferred sales charge fund: when shares of fund sold, NAV-sales charge

Maximum sales charges

• max sales charge: 8.5%
• if quality discounts must be available for large purchases
• if rights of accumulation, cumulative quality discounts must be available
• if 12b-1 fees must NOT charged
• when quality discounts, rights of accumulation, cumulative quality discounts, no 12b fees aren't present, can only charge 6.25%