Subject: File No. S7-14-08
From: Jimmy Kull
Affiliation: Cypress Wealth Management, LLC

November 13, 2008

I am writing today to recommend that the SEC adopt the proposed rule. I am a member of the Financial Planning Association and am one of two principals in a wealth management company. I am an attorney by training as well a holder of the Chartered Financial Analyst and Certified Financial Planner designations.

The current regulatory system is inadequate, especially as it relates to seniors who are vulnerable to aggressive sales agents. One anecdotal story from my own personal experience. Two years ago we were engaged to assist an elderly couple (husband was 92; wife was 86). They had been convinced by an insurance salesman to rollover existing annuities in addition to adding all of their liquid net worth into an equity indexed annuity product. The fees for this product were extremely high. It had an initial 12% penalty for early withdrawal and could never be surrendered without incurring some amount of penalty unless they or their heirs annuitized the withdrawal. In short, the product was completely unsuitable for this couple, especially considering that they were likely to move to an assisted living facility in the near future that would necessitate a sizeable down payment. Fortunately, we were able to intervene and stop the process before too much damage had been done. Despite this couple’s intelligence and sophistication, they were no match for sales pitch from the agent. They did not understand the liquidity risks, the surrender charges, or the fees involved. I believe equity index products are extremely difficult to understand and therefore require the additional protections set forth in the proposed rule.

Jimmy Kull
Cypress Wealth Management, LLC