Part 4 of the podcast series on factoring.
Saturday, May 13, 2006 at 01:23PM As promised here is the forth and final installment of my podcast series with Matt Bracy of Settlement Capital on the topic of factoring in the structured annuity business. This final installment is primarily discussing the role of trial lawyers, settlement professionals and financial planners in working with factoring companies.
You can listen to the forth podcast by clicking here.
As mentioned in our previous posts, this series has been designed to educate our audience about what factoring is, it's professional origins, who the key players where and the battles fought over the last decade in which some degree of regulatory and statutory control of the industry was created. I also wanted to begin the discussion of the ethical issues facing trial lawyers, settlement professionals and other financial planners in working with factoring companies to assist clients who are looking to cash in their annuities. This is probably the most contentious area of our industry at the moment, as many firms buy lists, solicit trial lawyers and now some life markets are entering the business and soliciting their own annuitants. How these ethical and legal issues are resolved will go a long way in shaping the next 5 to 10 years in our industry.
Next week I will be commencing a discussion of the marketing and compensation disclosure issues involving factoring and settlement companies, as one of the real hot button issues is the sense by many in the settlement business that factoring companies have come to dominate the word search and search engines when people come looking for structured settlements. This should be a lively issue for the rest of the summer and I welcome your suggestions for topics, guests and debates.
Reader Comments (1)
Great post and i'm glad your listening as usual. As you know the factoring issue is, as i've stated, the giant elephant in the parlor in our industry, with most people not choosing to discuss this rapidly growing "companion" industry in polite company, and instead either ignore them or work actively to destroy them. Your blog is of course the notable exception and as you know, we share many of the same concerns regarding the out right theft of trade names, mislabled searches, misdirection of web sites and other tools to bring people to their web sites.
However, I do believe there are some good people and good companies in this industry who are trying to shape some industry standards and ethics and I want to start giving them a voice. The reason being that most structured settlement brokers or planners, if they are honest, will admit they have on occasion used the services of a factoring company for their clients. Some of these same brokers got paid for the annuity, and they choose to get paid, often quite substantially, to handle the factoring transaction. How do we handle this ethical conflict? How do we begin to create a code of ethics as to disclosure of clients rights to liquidate all or part of their annuities? How can the trial lawyer know who to call, what their obligations are and who to trust in the pricing of the contract when a client shows up asking to "get out of their contract"?
As we all know, these are daily occurances in our industry, so i've decided to launch this series with an information, neutral education format to start, and then progressing into the harder and more inflamatory aspects of compensation, disclosure, comparative pricing, advertising, list selling and the like.
John, your going to be, if you accept, the next guest for the series on factoring advertising and the internet, in which we can discuss the abuses, point out some of the issues you've raised, but more importantly start to discuss the ethical and legal issues surrounding the settlement planner in the decisions they have to make when contacted either by an annuitant or a factoring company.
Great discussion, lord knows SSP and NSSTA aren't having it, so lets go at it and invite in all parties who want to help shape the debate.