November 13, 2008
I am a financial planner and member of the FPA in New Orleans, LA. I support the proposed rule giving the SEC oversight of the sale of Indexed Annuities. I have had the privilege of working for a major insurance carrier and also as a financial planner and this background has given me some insight to the marketing practices surrounding Equity Indexed Annuities. We have worked with clients who have purchased these products and are now locked in to a product that was sold without a thorough understanding, but with a 15 year surrender charge remaining. This is particularly troubling when many of these products are sold to the aging population that is in need of additional protections.
I have great concerns with those in the insurance industry who are marketing these products which are inherently tied to the equity markets, but who do not possess any background or licensure regarding investments. I have yet to meet a producer who could accurately explain to me the cost structure, the funding mechanisms for these products accurately. If these producers do not fully understand these products, how can their clients be expected to know what they are purchasing?
This rule seems to be a reasonable and balanced approach to enhancing state enforcement efforts and should be welcomed by practitioners in all areas of our industry.
Sincerely,
H. Jude Boudreaux, CFP®
Director of Financial Planning
Bellingrath Wealth Management