November 13, 2008
My name is Leon LaBrecque. I am an attorney, CPA, CFA and CFP® practitioner. I am the managing partner of a 12 person independent financial advisory firm and a member of the FPA. I have been in practice since 1977. Our firm supports the proposed rule on Equity Indexed annuities. In our practice, we have encountered several cases where unsuspecting individual were placed in indexed annuities under total and blatant misrepresentation by the insurance agents. The most frequent misrepresentations included the ‘guarantee or market returns’ and the failure to mention the steps of re-calculation or the substantial surrender changes. In our area, salespersons frequently sell the annuities as ‘senior security’ investments.
The indexed annuity proposed rule provides a rational approach to enforcement. Retirees are being preyed upon by unscrupulous salespersons, especially in these trying times. The purchasers are frequently mislead about liquidity, surrender charges, and the mechanics of the ‘market guarantees’. It is onerous for insurance salespersons to represent themselves as retirement specialists when retirement encompasses much more than the sale of a single, high commission product.
Accordingly, it is in the best interest of the investing public to enact the proposed indexed annuity rule as proposed by the SEC. Thank you for the opportunity to comment.
Leon LaBrecque
JD, CPA, CFP, CFA, LJPR, LLC