November 13, 2008
I am a practicing financial advisor and member of the Financial Planning Association and I am in support of allowing SEC oversight of indexed annuity sales in addition to state oversight by insurance commissioners. I have been a financial advisor for over 6 years and am licensed in securities and insurance in addition to having several industry designations and currently studying for my CFP. I have personally had an elderly client living in Florida that surrendered a variable annuity with a guaranteed minium withdrawal benefit to purchase an equity index annuity. The variable annuity was less then 2 years old and the client paid SIGNIFICANT surrender charges (I think it was around $20k) to purchase the new EIA. It is my firm belief that these EIA are SOLD by unqualified sales people. I believe in the FPA's stance of the following:
the vulnerable aging population needs additional protection from aggressive sales agents consumers are often mislead regarding the benefits of an indexed annuity liquidity risks, surrender charges, and other suitability factors are not always clearly disclosed or understood not all states have adopted suitability standards for annuity sales, nor do most insurance commissioners have adequate enforcement resources available some agents misrepresent themselves as offering a single retirement solution when in fact retirement planning is generally a complex planning process
Thank you,
Jeff