November 14, 2008
I very much agree with the stance of the FPA on this matter. Indexed annuities and all other annuities should be goverened much more strictly and hopefully, the SEC will continue to do so. I've been in the business for 12 years, have my own Firm, a CFA, a CFP, and have worked with high net worth clients during most of my tenure. I have never once, repeat never once worked with a client who has an existing annuity (sold by another broker) be happy about it after they purchase it. I work more with clients looking to me to find ways to unwind these complex annuities. I signed a 94 year old widow in January as a client. Right before she signed up with me, her former broker sent her paperwork to resign her annuity. Thankfully, she came to me for guidance and now we're working on unwiding the remaining four annuities she has.
From: Duane Thompson
Sent: Thursday, November 13, 2008
To: Doug Orear
Subject: FPA Regulatory Alert
TO: FPA Members
The Securities and Exchange Commission has re-opened the comment period for a rule that would allow for SEC oversight of indexed annuity sales in addition to state oversight by insurance commissioners. FPA is concerned that the insurance industry may pressure the SEC to drop the rule proposal. Several thousand emails from insurance agents opposing federal oversight have been filed, and numerous meetings by insurance industry lobbyists have been held with the Commission urging it to withdraw the rule. FPA supports the rule as a means of helping to curb abusive sales practices, particularly aggressive and misleading sales tactics targeting the elderly. FPA urges you to add your voice to the record by sending an e-mail to the SEC today supporting the Equity-Indexed Annuity Rule.
The deadline for comment is Nov. 17th, 2008. Please send your email to rule-comments@sec.gov and include "File No. S7-14-08 in the subject line. All comments are posted on the SEC website within a few days as part of the public record.
Some of the following talking points you may want to consider in your email message:
Identify who you are, i.e., a member of FPA and state upfront that you support the proposed rule
Mention your qualifications and experience in financial planning and/or as an insurance agent
Cite a 'horror' story involving a client who was previously sold an unsuitable equity indexed annuity
Cite problems with current regulation:
the rule is a reasonable and balanced approach to enhancing state enforcement efforts
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 annity 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 for taking the time to participate in this important issue!
Duane Thompson, Managing Director, FPA
To see the original rule proposal, go to: http://www.sec.gov/rules/proposed/2008/33-8933.pdf
To review FPA's comment letter, go to: http://www.sec.gov/comments/s7-14-08/s71408-1735.pdf