Back in May, John Oliver closed his segment by proposing that a one-time independent guardian or advisor review every sale before it happens, and a handful of states already appoint ad litems to do something close to it. On paper it's hard to argue with: a court-appointed advisor canvasses the market and makes sure the annuitant walks away with the highest offer on the table. We'd love to tell you it works. In practice, it too often produces the opposite of what it promises.

Here's what actually happens when an ad litem "shops the market." The ad litem, who as a rule knows the courtroom far better than they know factoring or finance, solicits competing bids and takes the best one. But the market they think they're canvassing isn't the market that exists. Big players, such as those with a family of companies, operate under enough names that a fistful of "competing" offers can all trace back to the same firm — a point we raised about industry aliases a decade ago, and one a Kiplinger column echoed this past June. The ad litem believes they've run a wide, competitive canvass. Often, they've just collected several quotes from the same house.

It gets worse where the competition is real. In the few jurisdictions that mandate ad litems, a dominant firm, and one in particular, can afford to bid below its own cost — not to serve the annuitant, but to win the deal and bleed the legitimate competitors who can't match a rate that loses money. It absorbs those losses on the strength of the notoriously poor deals it writes everywhere ad litems aren't required. Do that long enough and the smaller ethical firms simply leave those markets or leave the business altogether. Once the competition is gone, the "best available rate" is whatever the last firm standing cares to offer, and it’s always the big one with its support cast of companies — which nullifies the entire reason for appointing an ad litem to find the best deal in the first place. The reform meant to guarantee competition ends up quietly strangling it. If that pattern sounds familiar, it should: reforms in this industry have a long habit of ending up as a gift to its biggest players.

So no — we don't champion the guardian ad litem. Not because independent advice is a bad idea; it's a fine one. It's because an advisor who canvasses a rigged market and doesn't know the finance well enough to see that it's rigged, isn't the safeguard everyone assumes. The protection that actually works costs nothing and predates all of this: education and a referral. An annuitant should first hear about factoring from the structured-settlement broker who built the annuity, and that broker should refer only to factoring professionals with a clean, ethical record — no court appointment, no cold calls, no counterfeit competition, just a trusted professional pointing the annuitant toward one we'd put our name behind.

That was the right answer before Oliver's segment aired. It's still the right answer now.