MetLife Slashes Annuity Pay to Former Advisors
September 17, 2017
MetLife is taking a hatchet to compensation on annuities sold by former advisors who went to other broker-dealers in the wake of MetLife’s sale of its Premier Client Group to Massachusetts Mutual Life Insurance, InvestmentNews reports.
The publication cites a memo LPL Financial sent last week to its advisors who previously worked in MetLife’s Premier Client Group. The memo informs them that asset-based trail compensation rates will shrink to about 27% of current levels, InvestmentNews writes.
For example, an advisor receiving a 100 basis-point trailing commission will see it reduced to 27 basis points, or just .27 percent of assets, the publication says. The change kicks in after markets close Friday and will affect five variable annuity contracts and 11 fixed annuity contracts.
The memo clearly states that LPL wasn’t involved in the reduction and that it results from decisions made by MetLife, according to InvestmentNews.
At the same time, MetLife is not chopping compensation to advisors who stayed at Massachusetts Mutual, the publication reports, citing a June memo from the latter company. The reduction in compensation is unusual, industry participants tell InvestmentNews.
“Where is the rest of the trail going, as a rebate to the client or in the pocket of the firm?” Jonathan Henschen, a recruiter for independent broker-dealers, is quoted asking.