October 20, 2008
Average citizens are the losers if the SEC is successful in enacting 151A. Today hundreds of thousands if not millions of holders of non-indexed securities are wringing their hands at the losses they have experienced in the market. Well meaning financial advisors had these clients fully invested in one of the worst markets in history. Their clients undoubtedly were advised of market risk and accepted these risks. My experience with the typical registered representative, however, is that he thinks he is smarter than the market. I would much prefer a professional who encourages safe indexed products which eliminate down side risk.
Interestingly more conservative insurance advisors, those who have disdained the risks of the market, have placed their clients in fixed and indexed annuities to avoid the wide swings in the market. I doubt there is one person in the entire country who holds a fixed or indexed annuity who laments the fact that he or she has a saving vehicle without market risk. Why the SEC would want to eliminate these safe vehicles for the average citizen by making them subject to SEC regulation, and thus eliminating the vast majority of professionals who recommend these risk free savings vehicles for their clients, is a mystery to me.
As a wholesaler of fixed and indexed annuities and fixed and indexed life insurance products, I estimate that sales of these products will drop precipitously to the detriment of the citizenry because those professionals who are providing them to their clients will no longer offer them if they become registered products. I urge you to leave indexed annuities as they are, subject to scrutiny and regulation of State Departments of Insurance, who have proven much more efficient and effective than the federal government in regulating products and their sale as the recent banking and market catastrophe has illustrated.
Thank you for soliciting these comments.