Financial Planning Association of Florida February 26, 27 and 28, 2012

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1 Financial Planning Association of Florida February 26, 27 and 28, 2012 FPA of Florida Makes 10th Trip to Tallahassee Five years ago, the financial planning profession did not have a voice in our state capitol. So for the past five years, the FPA of Florida has traveled to Tallahassee twice a year, once during the spring legislative session and a return trip in the fall. We have met with legislators, elected officials, regulators and lobbyists. Each year our trips have gotten better and more productive. This spring we made our trip with nine professionals from the FPA of Florida, from seven cities representing five of Florida s nine local chapters. We traveled as ambassadors promoting the value of the financial planning process while reinforcing the importance of client and, for that matter, the citizens of Florida s interests. The nine representatives from the FPA of Florida making this trip were: Diane Hutchings, CFP LPL Managing Director Jacksonville FPA of Northeast Florida

2 Paul Miller, CFP Indian River Financial Group, Inc. Ft. Lauderdale FPA of Greater Fort Lauderdale Kimberly Overman, CFP The Financial Well, Inc. Tampa FPA of Tampa Claudia Sachs, CFP First Florida Investment Services Tallahassee FPA of Gulf States Terri Seefeldt, RHU Rogers Benefit Group Oviedo FPA of Central Florida Jeff Shamis, CFP Military Health Network Gainesville FPA of Central Florida Rick White Renaissance Regulatory Services Tallahassee Michael Zmistowski, RFC Tampa FPA of Tampa Charlie Fitzgerald, III, CFP Moisand Fitzgerald Tamayo, LLC Maitland FPA of Central Florida FPA members pictured with Florida House Speaker Dean Cannon. From L to R, Paul Miller, Diane Hutchings, Charlie Fitzgerald, Kimberly Overman, Speaker Dean Cannon, Terri Seefeldt, Jeff Shamis and Claudia Sachs.

3 We found that this year s trip was made more successful by lengthening it from a one-day to a two-day event. Although we arrived with 10 pre-arranged meetings, the extra day allowed us more time to schedule several impromptu meetings. Our meetings this year were highlighted by quality time with: Speaker of the House, Dean Cannon (Dist. 35) Representative Bryan Nelson (Dist. 38) Senator David Simmons (Dist. 22) Representative Douglas Broxson (Dist. 1) James Koburger, NAIFA Florida, Senior VP ( ) Rep. Broxson sponsored HB 1065 which provides several protections and standards for annuity sales practices to Florida citizens. We advocated for this bill during the visit. In all, we had about two dozen meetings with either the representatives and/or their legislative assistants. Sitting in the Senate Gallery waiting for our introduction: Paul Miller, Terri Seefeldt, Jeff Shamis, Claudia Sachs and Diane Hutchings In addition to our meetings with Florida Representatives, Senators and their staff members, we received personal introductions in the House and Senate chambers. Rep. Scott Plakon (Dist. 37) made our introduction in the House and Senator David Simmons (Dist. 22) introduced us in the Senate. Both introductions occurred in front of the entire body of legislators while they were in session. Many House and Senate members stood and applauded our presence at the Capitol, which was unexpected and appreciated.

4 2012 Florida Senate in session FPA members met with Representative Bryan Nelson (Center). Rep. Nelson is an insurance agent from Apopka, Florida.

5 FPA members pictured with Senator David Simmons (center) and Representative Scott Plakon (third from the right) In addition to our visits with legislators, we had meetings with representatives from three state government organizations: Office of Financial Regulation (The OFR supervises Florida s Broker Dealers, Registered Representatives, Investment Advisor Firms with Assets Under Management of up to $100M and the advisor affiliates with these Investment Advisor firms) Chief Financial Officer Jeff Atwater s office, Deputy CFO Tami Torres and the Division of Consumer Services Under the CFO s Office, Department of Financial Services, Division of Agent and Agency Services, Barry Lanier, Bureau Chief in the Bureau of Investigation Our first meeting on Monday was with representatives from the Office of Financial Regulation (OFR). We weren t able to connect with Commissioner Tom Grady this trip, but we did meet with Greg Hila (Deputy Commissioner) and Pam Epting (Director, Division of Securities) and Robert Kynoch (Chief, Bureau of Securities Regulation). A special note to this meeting is that we were joined by Rick White. Rick was the former Director, Division of Securities a few years ago. Rick has become a real friend to the FPA of Florida and adds an important dimension to our Tallahassee visits, especially with our meetings with the OFR where we worked for so long. We learned the OFR has made significant organizational and internal process changes to increase their operational efficiency, one of which is the formation of an Early Detection Team to follow up faster on leads provided partly through complaints. They are also in the process of creating a Tips line that citizens and even professionals can call if they suspect someone is dealing unfairly regarding securities or investments. They also expressed interest in coming to

6 speak to our FPA chapters in Florida about regulation and compliance matters. They have done this before and those presentations and Q&A time were always enlightening. FPA members pictured with Tasha Carter, Division Director, Division of Consumer Services and Tami Torres, Deputy CFO (second and third from the left, respectively) From the CFO s office, we met with Tami Torres, Deputy CFO, Greg Thomas, Director, Division of Agent and Agency Services and Tasha Carter, Division Director, Division of Consumer Services. We discussed their new Your Money Matters website. They requested suggestions from the FPA on any improvements. Their new website is located at In the meeting we also discussed: (1) The effects of Dodd Frank legislation to the financial planning profession. (2) House Bill 1065 and Senate Bill 1476 which are designed to increase safeguards for citizens who are purchasing insurance and annuity products. This bill expanded protections beyond Florida citizens aged 65 and above. It also sought to incorporate National Association of Insurance Commissioners (NAIC) standards consistent with other states. (3) Regulatory Relief bill to remove unnecessary state government regulations. (4) Their interest for us to come back to the CFO s office to provide education on financial planning topics to government staffers.

7 (5) Results from our latest FINRA broker study and how we are now seeing Florida Insurance Agent license revocations where agents had recently been barred from FINRA. These agent revocations are the result of the new Safeguard our Seniors legislation that FPA members advocated for in 2010 and became law on January 1, (6) We received assurance from Ms. Torres that she would work with us to help proclaim Financial Planning Week 2012 through a Cabinet-wide Resolution and a possible photo opportunity with CFO Atwater, if not the entire Cabinet. Our third and final meeting was in the Department of Financial Services, with the Division of Agent and Agency Services. We met with Barry Lanier, Bureau Chief in the Bureau of Investigation. Barry has been very helpful in previous visits and it was good to see him again. In this meeting, we invited Twyla Sketchley, Esq. to join us. Ms. Sketchley is a Board Certified Elder Care Attorney. She is a member of the Academy of Florida Elder Law Attorneys, belongs to the Elder Law section of the Florida Bar and advocates for issues that affect her profession and Florida s seniors. We discussed several topics with Mr. Lanier, including the following: (1) The problem of certain Annuity products being marketed and sold as excludable assets for Medicaid planning when in reality they aren t excludable. This obviously can create significant problems for seniors and their families. (2) We discussed the problem of exploitation recovery for seniors whose mental ability is failing and then the resulting problem because the senior s decreasing memory and mental ability prohibits them from giving testimony against the allegedly unscrupulous insurance agent. It is a situation where most experts can view the facts and see that something probably is wrong with the sale, but without the senior s testimony it is very difficult, if not impossible to bring a valid charge of wrong doing. (3) We discussed Stranger Originated Life Insurance (STOLI). Barry and (as far as we could tell) the Department of Financial Services would be concerned if there was an attempt to relax standards or laws to make it easier for this specific use of life insurance in Florida. Granted STOLI isn t illegal in Florida. But, most insurance companies try to avoid life insurance being used this way by the questions that are asked in their applications. If the DFS finds that an insurance agent has submitted a fraudulent application to effectuate a STOLI sale, then the DFS will pursue that agent because that activity is clearly illegal. (4) We discussed how investigations into insurance agent practices almost always resulted from complaints filed by citizens. Many complaints also come from insurance companies, licensees, and other regulators. The DFS does examine and inspect some agents and agencies proactively, but the majority of their exams and inspections are complaint driven and reactive. In contrast, investment and securities regulators frequently examine brokerage firms, investment advisor firms and their representatives proactively. The best place to file a complaint regarding inappropriate insurance and annuity sales practices is the Florida Consumer Helpline at This helpline receives about 1,000 calls per day. These calls are mostly citizens calling for information about purchasing insurance, understanding

8 insurance policy provisions and even assistance with mediation settlements. Complaints do come through this line, but not an overwhelming amount. (5) We also discussed the recent insurance agent revocations that are now occurring as a result of the department s new authority to revoke licenses granted by the Safeguard our Seniors legislation enacted in January Sitting in the House chamber s gallery and waiting for our introduction: Charlie Fitzgerald, III, Claudia Sachs, Paul Miller and Diane Hutchings Over lunch on Tuesday, members met with Sarah Iarussi from Lobby Tools. This is a powerful tool and internet service which track bills and amendments through the Florida House and Senate. Lobby Tools is recommending that FPA consider subscribing to their service to be kept better informed especially during legislative session. We learned that many law makers and most of the lobbyists in Tallahassee subscribe to this well received service. During our trip, we met with four prominent Tallahassee lobbyists: Tim Meenan, Blank & Meenan, P.A. (Lobbyist, Florida NAIFA) Matt Ubben, Confianza Consulting, Inc., Government and Public Affairs Lisa Miller and Meghan Kelly, Lisa Miller & Associates Eric D. Prutsman, Esq., Prutsman & Associates, P.A. This is the first time we met Mr. Prutsman, who was introduced to us by Tim Allen, Director of Government Relations for the Southwest Florida Chapter. We have met the first three lobbyists before, as they have been helpful to us during previous trips, and we feel it is important to

9 maintain our connections with them. If it ever becomes necessary to introduce legislation or to perhaps defend against legislation that negatively affects financial planning or Florida citizens, then these firms represent our starting point for help. We have learned that being present at the Capitol creates opportunities we didn t foresee during the planning phase of our trip. Most notable this year was our time with Mr. Meenan at our dinner Sunday night. He tipped us off that there was an effort to introduce legislation (by way of an amendment to an existing bill) concerning Stranger Originated Life Insurance (STOLI). Apparently lobbyists representing the Hedge Fund industry were trying to add an amendment to an unrelated insurance bill that would soften insurable interest restrictions in Florida. This change would give hedge funds the opportunity to attract citizens into life insurance policies that the hedge fund could ultimately acquire and securitize after the two year incontestability period had passed. We feel securitization of life insurance policies would drive up premiums, not to mention other problems. It was easy for the FPA to add this issue to our talking points and to oppose any such amendments or legislation. As a result of Mr. Meenan s tip, we were able to join forces on this issue while we were there. We educated Representatives and Senators about the STOLI issue and the detriment that it represented. This was another perfect example of how important it is to be on the ground in Tallahassee. It also opened our eyes as to how quickly amendments can be added to unrelated bills that can radically change the law. Further, it also became abundantly clear that if the day ever comes when Financial Planning becomes a regulated profession at either the federal or state level, the FPA s ongoing and active involvement in the legislature will become vital, as we have seen how amendments can be dropped into an existing bill that can then have huge ramifications to existing law. Florida s Capitol Building This report is submitted by Charlie Fitzgerald, III, President