November 13, 2008

Subject: File No. S7-14-08

As a financial planner who is also licensed to sell insurance products, I am keenly aware of the unscrupulous tactics some agents use to sell annuity products to seniors. Each year I’m required to take more hours of Continuing Education focused on fair sales practices when marketing to senior citizens. I’m outraged that I have to take more hours of training designed to “educate” me on fair practices. I can’t imagine anyone who would use these practices unwittingly because they hadn’t been “educated”. Those that take advantage of others don’t need education, they need to find another line of work.

Don’t punish those of us who seek to serve our clients’ interests. Start pulling the licenses of abusive annuity salesmen. A good step toward that end is Rule 151A which would bring index annuity products into the realm of securities, along with the required licensing and oversight.

One prospective client was sold an index annuity after being intentionally mislead about the product . Luckily, although he had purchased the annuity several months earlier, I was able to get it cancelled and his money refunded since the agent had never “delivered “ the policy and thus the 10 day free-look period had never begun.

Another client, aged 85, was convinced by scare tactics, to surrender one annuity and purchase another without being told of the surrender charge, which was over $25,000. Once again I was able to cancel it when my confused client called to tell me that she “may have signed something”.

No one likes additional regulation, but since some can’t be trusted to do the right thing, I’d prefer that index annuities have the same oversight as any other security. Please pass this rule now.

Jim Garrett, CFP®, AIF®
Financial Planner