September 10, 2008
-The SEC website states that
I am a college graduate and have owned my own business for over fourteen years.
I have been an insurance agent in California since 2001, and began my career as a Certified Long Term Care Specialist.
During these early years, in order to do appropriate and suitable long term care planning, I needed to know the assets of the retirees I was dealing with. These retirees were average, middle class Americans. I was often very uncomfortable with the accounts they were invested in. Their "advisors" were placing the MAJORITY of their funds in securities/mutual funds or variable annuities.
If the market went down these retirees would lose a significant part of their retirement savings. In fact, many did lose about 40% of their retirement savings from 2001 to 2003. They have still not recovered their losses.
Moreover, nine times out of ten if the retiree had been placed in a variable annuity they had no idea their money was at risk. They were told by their "advisor" that these monies were guaranteed and insured that they were safe and they would not lose principal or interest. Total fallacies purported by SEC regulated advisors.
For this reason I began looking for accounts which could offer a way to keep up with inflation while at the same time offer them safety of their principle.
Today, I have built a business which deals strictly in guaranteed and insured accounts. We help customers with certificates of deposit, share certificates, money markets, savings accounts, fixed interest annuities and equity indexed annuities.
In today's economy it is very difficult to find accounts where the average customer can enjoy safety and still keep up with inflation. The one solution that I have been able to find over the years is an equity indexed annuity.
An equity indexed annuity provides the customer with the upside potential of the market while eliminating the risk to principal and interest earned from prior years. Yes, the interest is tied to index growth. No, the principal and earned interest is not subjected to index decline.
So how is this a securities product? The insurer takes the risk - not the customer.
I have no interest in becoming securities licensed. I pride myself on offering ONLY safe insured guaranteed accounts. I do not want to be associated with a profession that I have seen lose so much of our retirees' savings. Savings that they do not have the time frame to recover.
Securities brokers are not motivated to offer equity indexed annuities because this product does not provide a continual income stream to the broker. These brokers could now, if they chose, offer EIAs. However, they don't. They prefer stocks/mutual funds/or variable annuities. Risk products.
It appears that the motivation behind turing an equity indexed annuity into a securities product is not to protect the consumer, but to recapture the billions of dollars that the securities industry is losing to these types of annuities.
I strongly oppose rule 151A. I believe that the SEC as the "primary overseer and regulator of U.S. securities markets, . . ." will be perpetrating a serious diservice on all middle class American retirees if they choose to adopt this rule.