And just who is policing them?
October 28, 2025 by Sheryl J. Moore
I know I am going to get a lot of hate mail for this, but I have to agree with Bruce Kelly‘s (of InvestmentNews‘) position on this piece.
Financial advice cockroaches have plenty of life selling insurance
Are “cockroach” bad brokers moving to the insurance industry when they get caught?
YES, they are.
And just who is policing them?
NOBODY?!?
(Oh wait- the National Association of Insurance Commissioners (NAIC) has this handled, right?)
Bruce indicates of these bad actors: “…new research shows that a default career path is selling insurance, particularly annuities, where they can mask themselves as financial advisors and continue to cause harm to potentially thousands of clients.”
Conceivable.
He goes on- “the insurance industry is much more lightly regulated than Wall Street, regional and small broker-dealers and registered investment advisors, which all must answer to either FINRA or the Securities and Exchange Commission.”
Factual.
Indeed, ‘insurance seems to attract FINRA brokers with a history of misconduct,’ and bad brokers ‘flow to insurance,’ are two of the conclusions of the paper, titled ‘Regulatory leakage among financial advisors: Evidence from FINRA regulation of “bad” brokers.'”
Believable.
The authors of this research looked at a decade of data which conclusively shows that “bad brokers” lie in wait in the insurance industry. In fact, 98% of the ‘bad’ FINRA brokers who withdrew from FINRA registration remain in insurance today.
Irrefutable.
How will we ever have “insurance agents” presented in a positive light, when there are so many bad actors among them?
Let’s talk amongst ourselves. Join on LinkedIn here -sjm
