Industry Stunned By Ohio National Decision To End Broker Contracts On VAs
October 4, 2018 by John Hilton
“Crazy,” “stunning” and “very odd” were just some of the reactions today to news from Ohio National that it will end advisor compensation on existing variable annuity contracts.
Many are calling the move a dangerous precedent for an industry that relies on a web of relationships to move products through various distribution channels.
“I have never heard of anything similar to this in the entire 22 years I have served in the insurance industry,” said Sheryl Moore, president and CEO of Moore Market Intelligence and Wink Inc., publisher of Wink’s Sales & Market Report.
A legal fight to force Ohio National to honor the contractual agreements is likely, Moore predicted.
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“If the agent’s not getting any commission, what’s his incentive to properly manage the assets?” Moore said. “How are they acting in their clients’ best interest if they’re cutting their agents’ commission? It’s almost as if they’re saying ‘We want you to get rid of this business.’”
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