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Section 1: What is a Syndicated Offering?
A syndicated offering occurs when a broker takes a smaller commission so that his client can get a higher rate of return.
There are a few requirements a broker has to meet before he is offered a higher rate on a fund.
- Syndicated offerings are only available on fixed rate funds (obviously because a higher rate cannot be guaranteed on a variable rate).
- The marketing department must clear the broker asking for the better rate.
- This is done, by cross-referencing the broker�s name with the marketing department�s master list.
- The master list will be circulated via e-mail.
If the broker adheres to the above requirements, then his specific information can be entered into our database.
Section 2 : Why Do We Need This Program?
Whenever a broker requests a special rate, we have to enter the valid information into our database. Before the advent of the Syndicated Offering Set-up Window, the information was entered into a window in the VISTA system called CSA007. While this method was ample when syndicated offerings were available to only a few brokerage firms, now that these offers are available to nearly all brokers, we need a new system to enter this data.
The Syndicated Offering Set-up Window fills this need by providing us a single window that takes in all the information the system needs.
Section 3 : How Do We Use This Product?
Upon loading this window you will see the Syndicated Offering Set-up Window. This window is split into seven sections;
- Product Information
- Eligible States
- Participating Firms
- Eligible Events
- Age Ranges
- Change Current Syndication
- Control.
3.1: Product Information
The Product Information Area is the first area you will want to enter information in. You can find it in the upper left portion of the window, and It is used to enter information specific to the product that is being sold, and the group selling that product.
There are twelve parts to the Product Information section.
- Syndication Code
- Wholesaler
- Writing Company
- Product
- Version Number
- Version Type
- Duration
- Effective Date
- Term Date
- Threshold
- Interest Rate
- Prospectus
3.1.1: Syndication Code
The syndication code is a way to communicate with the brokers, information pertinent to the transaction that we've made with them. Usually, we use the letters HART followed by a number equal to the duration of the offer.
3.1.2: Wholesaler
This textbox is used to enter the name of the wholesaler that is selling the product. You'll notice to the right of this box a list button. By typing the beginning of the name in the textbox and clicking on the list button, you may select the proper wholesaler from a list of names. This is a useful feature when you only have a partial name or an abbreviated name. It is also useful to note that if you only have part of the name (not necessarily the beginning part) then you can use a percent sign in front of the inserted text to view a list of wholesalers that have those letters grouped somewhere in their name. For example, If you knew that the wholesaler had the word beard in the name, but you didn't know the whole name, you could enter %beard and view a list of wholesalers that had the word "beard" in their name.
3.1.3: Writing Company
This box is used to indicate the writing company for the offer generated by the Syndicated Offer Set-up application. It will either be Hartford Life or ITT Hartford Life and Annuity.
3.1.4: Product
This textbox is used to enter the name of the product being sold. Like the Wholesaler and Writing Company fields before it, you can click on the list button to pick the right product from the list.
3.1.5: Version Number
This textbox is used to enter the proper version number of the product being sold. You can select a number from the list by clicking the button on the right, however, you'll have to enter a product in the product field before doing so. This is because each product may have different product version numbers. It wouldn't be a good idea to select a product version number for a product if that product version number doesn't exist for that product.
3.1.6: Version Type
Each version of each product offers a variety of bonuses. These bonuses are specified in the version type field. The list button on the right can be utilized so that a selection can be made from a pop up list. Once again the information in this field must be entered after the product and product version number fields have been filled.
3.1.7: Duration
This textbox indicates the length of time the contract extends. Generally they extend 5 or 10 years, however different versions of various products may have a varying duration. The proper duration may be picked from the list button on the right, but only after the previous fields have been filled in.
3.1.8: Effective Date
The effective date is the date on which the offer becomes active.
3.1.9: Term Date
This date is the date in which the syndicated offer ends. After this date the higher interest rate ends and goes back to the normal fixed interest rate.
3.1.10: Threshold
Threshold indicates the maximum amount of business that can be transacted though a single syndicated offer. It is defaulted to $10 million, however this default amount basically indicates no restrictions on the broker. This is because there are very few brokers that would ever need a threshold set that high.
3.1.11: Interest Rate
The interest rate is the special interest rate that is designated to a broker's client through the Syndicated Offer process. This rate will be affected by the duration of the product, the commission made by the broker, and the age of the person buying the product. Enter a percent amount.
3.1.12: Prospectus
You will not be able to enter anything into this particular field. It is used to display the prospectus information pertinent to the transaction being processed.
3.2: Eligible States
The product that you specified in the Product Information Section, may have certain restrictions depending on its version and version type. In this area, you would specify which states, if any, this product would be illegal in.
If the version of the product that you are specifying is allowed in every state, then make sure the All States check box is checked. It's default value will be checked.
Should you need to specify a state in which the product is disallowed, un-check the All States check box and then click the Exclude button. This will bring up an alphabetical list of each state. Select the state in which this product will not be allowed and it will be added to the Excluded States list. This has to be done for each state that this product is not allowed in. If it's not allowed in 49 states then those 49 states should be in the Excluded States list.
Should you need to remove a state that you've put on the list, you must highlight the state by clicking on it and click the remove button at the bottom of the list.
3.3: Participating Firms
This section of the Syndicated Offering Set-up Window holds the information on the firms that can be included in the particular syndicated offering that you are setting up. For every brokerage firm that can take part, an entry must be made on the Participating Firms List.
To enter a firm into the list you would enter the first part of the name in the Firm Name textbox. Then you would click find to view a list of firms that started with the text that you typed in. Once you select a name from the list the proper information will be filled in below.
You could also use a percent sign before the text in the Firm Name field to specify that you are looking for a firm that contains the letters that you are entering. For example you could enter %futures to view a list of firms that had the word futures in their names.
You can also select a firm if you know their tax id but you don't know the name. By entering the nine-digit tax id, and clicking the find button, the proper information will be displayed below on the Firm List. Because the tax id is unique to each firm, there is no list to select a firm from. The information is automatically propagated to the list below.
Should you need to remove a firm that you've put on the list, you must highlight the firm by clicking on it and click the remove button at the bottom of the list.
3.4: Eligible Events
This area of the window is where you would specify whether this offer is new or a transfer of funds from a previous account. You can select from the following; New Business, 1035 Exchange, or an Internal Exchange.
- New Business; this checkbox should be filled if the payment for the product is coming directly from the customer. It is, by default, checked.
- 1035 Exchange; this checkbox should be checked if the payment for the product is being transferred by the broker from an account that already exists outside Hartford Life. This checkbox, by default, is checked.
- Internal Exchange; This checkbox is checked only when the payment for the product is coming from another Hartford Life account. This is not checked by default because it is generally deemed un-acceptable.
3.5: Age Ranges
The two rows of textboxes in the Age Ranges specify the commission being paid out to the various parties involved in selling our products. The top row of textboxes will specify the commission rates for the first set of age ranges. The bottom row will specify the commission rates for the second set of age ranges. This information will fill itself in, according to what you have entered in the other sections of the window.
The information is displayed in the following parts:
- From; the owner of the product must be older than this age for the parties involved to get the commissions displayed to the right.
- To; the owner of the product must be younger than this age for the parties involved to get the commissions displayed to the right.
- Market Fee; this is the amount of commission that is owed to the wholesaler for selling this product under a syndicated offer.
- Firm Rate; this is the amount of commission that is owed to the broker for selling this product under a syndicated offer.
- Commission Type; this is the method in which the commissions are calculated. The various methods can be selected by clicking the list button on the right of the textbox.
3.6: Change Current Syndication
This window is utilized when you have to change the information in a syndicated offer that has already been processed. Under this section of the Syndicated Offer Set-up Window, you have three choices. You can change the data in the Product Information section, you can add state exceptions, participating firms, and eligible events, or you can remove state exceptions, participating firms, or eligible events. In order to prevent mistakes from being made you can only alter the information a piece at a time. This is done by selecting the proper button, and then making the necessary change. Only the piece of information associated with the button that you clicked will be available to change. Therefore if you have to change multiple things you must do it one at a time.
3.7: Control
When you have completed altering the information stored in the Syndicated Offer Set-up Window you have three choices. You can clear all the entries and start over, you can save the entries and work on a new syndicated offer, or you can save it and exit to the operating system.
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