November 13, 2008
My name is Jason Wheeler and I support the new proposed rule.
I have been licensed in the investment industry since 1999. I have also been a licensed life insurance agent since 1999 and a LTC agent since 2004. I have worked for independent firms and in a wirehouse. I now own my own firm and clear through an independent broker/dealer. I have been working with seniors since I have been in this profession and I run a comprehensive planning, asset management and insurance practice.
Working with seniors has opened my eyes to how they are targeted by different sales tactics. My clients bring me the advertisements and invitations they receive so I can help them decipher the sales jargon and scare tactics from real information. I have never had a client complaint and I put my clients’ interests first. I believe our industry needs to be held to a higher fiduciary standard. That is why I am a CFP® and an Accredited Investments Fiduciary®. That is also why I started my own firm to rid myself of a “revenue first” business philosophy. I also have a MBA and I teach in the finance department at the local University.
Since I started in 1999, I have seen two of the worst bear markets in history. Now in my 10th year in the business, I have seen more downside than some in my industry ever experienced during their entire career. I have stayed true to the profession because people need professional guidance and it is one of my life’s purposes.
On to this new rule and the purpose of my email: I have seen first hand how clients believe they are buying “risk-free” investments and how shocked they are to learn of the many complicated features of Equity Indexed Annuities. There was a self proclaimed local radio personality/real estate investor/estate planner that would discuss stocks on his radio program and then invest clients’ money into his own real estate endeavors or in E-I Annuities. He was able to do this because he was NOT securities licensed and my state did not have the regulation to police this guy. He committed suicide eventually and now all of his clients are finding out how much he did not tell them about the products. There needs to be protection for the vulnerability of an aging population. These “sales” agents are targeting seniors and I do not know a single advisor/agent in this business that I respect that sells equity indexed annuities and I think the rule is a good first step. I found that seniors were sold these products by individuals that did not have securities licenses but only insurance licenses. How can you have an index based product but not be licensed to sell the underlying securities! It’s outrageous to me. I have had lots of conversations over the years about these annuities and I have found that seniors are not told about the liquidity risks, surrender charges and the form of indexing used. Even those that were told simply don’t comprehend these complicated annuities. They are sold as a quick fix to someone’s fear of the market and a one stop solution. I see no merit in this approach and further focus on regulating these products must be made mandatory. Additionally, history shows that the average annuity holder does not make it past the surrender charges. Shouldn’t the average holding period be disclosed too? And in this economic downturn, I would expect to see more surrender. That’s lots of money lost to surrender charges. Our state insurance department, NC, has begun the process of redesigning all the licensing and agent standards with a key motivation coming from the equity index annuity aggressive sales to seniors.
Again, I am fully supportive of this new rule and only stress that this should have been done years ago.
Thanks,
Jason
Jason T. Wheeler, CFP®, AIF®, MBA
CERTIFIED FINANCIAL PLANNERTM Professional
Accredited Investments Fiduciary®