September 5, 2008
To say I believe this proposed regulation is misdirected would be a tremendous understatement.
In what financial universe is any security EVER provided with a guarantee...other than the guaranteed probability to lose money?
By categorizing these products as securities, you will be eliminating these long term saving solutions from my portfolio, which negatively affects my children and grandchildren You know, as does everyone else interested in this topic, that this regulation will be successful at accomplishing what FINRA has wanted for years - eliminate the indexed annuity from the marketplace. FINRA could care less about the safety of my money or suitability of where I put my money. All they care about are the management fees they lose when I choose not to put any of my money at risk based on the recommendations of some idiot, fresh out of college, who pushes the latest "hot stock or mutual fund" and then ducks my phone calls when I want to know how in the heck this hot deal just lost 20% I can tell you for a fact I will never need to have that conversation about index annuities.
An informal survey of friends and acquaintances illustrates that the only group of professionals that are trusted less than "certified financial professionals" are car salesmen and politicians. I wonder if there is a reason that the ratio of complaints coming from professional brokerage houses is 100 times larger than coming from the index annuity industry? This is a little fact that just a bit of digging yielded. I wonder why the all powerful SEC could not have come up with that number? And you really want me to put my money in the hands of that type of organization? I don't think so.
I would like to close with these thoughts. Product improvement, agent training and industry oversight can always be uplifted in every industry. The selfish acts of a relative few bad-apple agents definitely does not outweigh the tremendous benefits of index annuities. If you think through the strongly negative long term repercussions to the taxpayers you are ostensibly chartered with protecting, you will most certainly agree that this regulation is ill conceived. Do not give into special interests at the expense of the greater good. Find a compromise solution that maintains the availability of this unique and quite useful financial planning tool.
Thank you,
Jim Harris