November 9, 2008
The proposed rule change to classify indexed annuities as securities and require those agents selling these annuities to have series 6 or 7 securities license and to be supervised by a broker/dealer will limit the accessibility of educators to these avenues for saving. Most of my clients are teachers or education support personnel whose savings contributions run between $25.00 to $200.00 per pay check. These contributions mean a sacrifice for many of these people in order for them to have a retirement that is above the poverty level. It is a big deal for them. It isnt a big deal to a broker who deals with large contributions. Brokers are not going to be interested in servicing these small accounts. These educators and thousands of others in South Carolina will not be given the opportunity to participate in these savings plans which assure them safety of their premium and the interest they are earning.
Every week I meet educators who have invested in products that are tied to the market and its risk and are suffering for it. Many choose to transfer their savings from market-risk products managed by trained investors where they are loosing money to our product or open a new 403b indexed annuity that offers them a safe place free of market risk and requiring no special training to maneuver the market successfully. No broker or specially trained advisor is needed. The client makes the decision about the percentage allocation for their funds annually. This user-friendly product does not need supervision by a broker/dealer.
Is this new regulation to protect the consumer or to protect the broker/dealers who will benefit from the protection from competition this new regulation will grant them? It seems the little guy is again being given fewer options and less opportunity to have a quality of life in retirement that is above the poverty level. Please reconsider these damaging classification changes.