We recognize that not all Compliance Alerts and guidance may pertain to your practice. However, we highly recommend that you read, review and if you have
questions, please feel free to give Compliance a call to discuss the Alerts further. For those of you with SalesForce access, we will be working to
add the Alerts to the Public Documents folder under the Documents tab in SalesForce. Once the new Advisor website is complete, we will also archive
the Alerts there as well for your convenience.
High Yield Bonds
With the U.S. experiencing an extended period of unusually low interest rates, it is important to provide guidance, disclosures and risks to clients with
these investments. For client purchases of High Yield Bonds (bonds rated below investment grade), starting July 1, 2015 we will request
that with any new purchase of a High Yield Bond that you provide the client a copy of the IPI High Yield Bond Brochure and then sign and return to
Compliance the High Yield Bond Disclosure Acknowledgement for both brokerage and advisor accounts. This form will be good for a one year period. A
copy of the Brochure and Disclosure are currently located on the Advisor Site under Broker/Dealer and/or RIA and then Documents as well as at the following
Variable Annuities – L Shares
We want to keep you up to date on hot topics on the regulatory front. At the FINRA Chicago District meeting last Monday, it was discussed that L-share
annuities are currently under the regulatory microscope. As annuities in general are typically viewed as longer term investments, L-share annuities
have 3-4 year surrender periods, higher costs to a client, increased M&E and higher commissions to advisors. A client’s time horizon must be short-term
with L shares. Investment News published an article recently about Voya’s restriction of L-share sales with income riders which can be found at the
link below for your review. FINRA is viewing L shares with riders as “presumptively unsuitable.” Please be cognizant of this share class, thoroughly
document the rationale for your recommendation/suitability for the client and review the regulatory guidance being provided on the issue. Any questions,
please call Compliance.
Annual Firm Element/Compliance Meeting/Questionnaire – CE Requirements
It is that time of year again to complete your annual CE requirements. We will be shortening the time frame to complete CE this year from three (3) months
to two (2) months – July and August. The start date will be July 7 and run through August 31, 2015. You will receive a Compliance Alert next week with
more details, so stay tuned.