Industry News

This week’s top stories for advisers

As the week comes to a close, it’s time to catch up on the advice industry’s biggest developments…

As the week comes to a close, it’s time to catch up on the advice industry’s biggest developments that grabbed readers’ attention.
Variable annuities took center stage, but for all the wrong reasons. LPL Financial had to fork over a hefty settlement over failing to adequately document 1035 exchanges, and an ex-broker who admitted to running an $80 million variable annuity scheme settled with the SEC.
Plus, a gut-wrenching, first hand, account of the importance of having a business continuity plan opened readers’ eyes.
Finally, Donald Sterling’s legal drama offers advisers some tough estate and tax planning lessons.

LPL’s second quarter dogged by regulatory issues
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LPL Financial CEO Mark Casady said he wasn’t happy with the firm’s second quarter results, which suffered due to increased regulatory costs. LPL was hit with a $2 million fine and ordered to pay $820,000 in restitution over failures to properly document variable annuity exchanges. Reader S_Thomas believes LPL’s recent addition of former Vermont securities director John Cronin will alleviate issues related to 1035 exchanges.

Ex-broker cops to $80M variable annuity scheme that preyed on the terminally ill
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Ex-broker Michael A. Horowitz admitted to helming a variable annuity scam that targeted patients in nursing homes and hospice care and paid him $317,724 in commissions. He settled with the SEC, who ordered him to pay disgorgement of $347,724, along with prejudgment interest of $103,025 and a $400,000 penalty. Over on Twitter, @RobBartenstein proposed another piece of penance:

@newsfromIN what happened to floggings in the town square? This rates one.

— RBIII (@RobBartenstein) July 31, 2014

An emotional example of the importance of continuity planning
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“This has really opened my eyes to the importance of advisers having a plan in place, just in case,” says Dan Candura, an adviser who is facing inoperable cancer and scrambling to prepare his clients — and his practice — for when he’s gone. His story is a cautionary tale, and advisers without a plan for the unexpected should check out these nine steps to take to set up a continuity plan.

Donald Sterling’s court case holds lessons for advisers
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The court battle over Donald Sterling’s removal from the family trust that controlled the Los Angeles Clippers raised pertinent issues for advisers facing delicate tax and estate planning scenarios. Reporter Darla Mercado broke the nuances of the Sterling case down, giving advisers food for thought as they work with elderly clients’ trusts and estates.