September 8, 2008
The fact that the SEC wants fixed index annuities to be registered products is merely a money grab by the big brokerage houses. In the past 20 years many financial advisors and agents have realized that they do do need to be affiliated with big brokerage firms. The firms are losing millions of dollars income because they no longer control billions of dollars in mutual funds. The houses earn money when the customers earn money, the houses continue to earn money when customers lose money. Customers are not stupid. Why pay brokerage fees if their accounts lose principle?
Billions of dollars of mutual funds have gravitated to index annuities because customers do not like paying for poor performance.
Now brokerage firms are trying this incidious tactic just to recoup millions that they have lost due to the brokerage companies poor customer service.
Follow the money, follow the money. Who gains because the brokerage houses now have another registered product that previously beyond their control? Not the client. Tell me what client lost a dime while having his/her money in an index annuity?