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: Jim Hamilton's World of Securities Regulation

Insurance Agents Who Recommend the Sale of Securities to Individuals at Financial Planning Seminars

By Jim Hamilton

Kentucky has recently grappled with the issue of insurance agents unlicensed to sell or provide advice about securities, in fact, advising the sale of securities to the clients with whom they meet at financial planning seminars to discuss the respective clients' financial portfolio. Kentucky's regulatory position on the situation is as follows:

Agents licensed to sell insurance but not to sell or provide advice about securities may claim a "safe harbor" from Kentucky's investment adviser licensing requirements when they recommend the sale of securities to individuals at financial planning seminars as part of an overall strategy to "reposition" or "rebalance" the individuals' financial portfolio. To achieve the safe harbor, the insurance agents must: (1) provide written proof that an insurance company has approved the agent's promotional materials; (2) make no recommendations about specific securities when addressing an individual's financial situation; and (3) provide a prescribed bold face disclosure on a form signed and dated by the individual stating that the agent is licensed to sell insurance but is not licensed to provide advice about securities.

Full post as published by Jim Hamilton's World of Securities Regulation on June 11, 2008 (boomark / email).