November 13, 2008

Subject: fle no S7-14-08

I am an FPA member and I SUPPORT the proposed rule.

I am a Certified Financial Planner who has been in practice for 15 years. I am licensed to sell variable products and insurance products.

I am NOT a proponent of Equity INdexed Annuities because I cannot understand how a product that can offer such great commissions to us can be good for the client. And its all about the clients. I have tried several times to work the numbers in the clients favor and finally took Equity INdexed Annuities out of my product possibilities.

Equity Indexed Annuities have a great story to convince the common person as to the safety and potential. And one such story led to me obtaining a very nice client. He attended a luncheon and the agent subsequently met with my now clients a couple times. The wife loved the idea but the husband found it just did not pass the smell test, so he went online to learn more (PhD's are known to do that). This salesman was proposing he put his entire 401k of $850,000 into an INdexed Annuity (client left the company years ago but kept the money in the 401k). This would have made great commissions for this luncheon salesman. But the gentleman, whom I have known for 25 years but whom lives a long way from me, decided to call me to either confirm his findings that the facts did not live up to the pitch or that the other agent was correct and his research was missing something. After asking many questions of what he learned and what his thoughts were, he told me I was asking all the questions he had hoped I would. Then we did some math and he made his own decision. This was as a friend whom I had never approached about doing business with me, and he had never approached me. But at the end of the conversation he asked if I would work with him so he did not have to feel he needed to do so much homework each time. He said he still planned to take these salesmen up on their free lunches but at least he would not have to worry about any more house calls.

The current regulations leave the aging population open to these aggressive luncheon salesman. They make it sound so easy and safe. But as my friend found out, there was a lot more to the product that was never disclosed - even after lunch and 2 meetings. He had to find out on his own that his money was tied up, that he only participated in some of the returns. While I am not a fan of regulation, there are too many agents like this one who feel its one stop shopping, when there is a lot more to comprehensive retirement planning.

I feel too many people like to skirt the variable world by selling these "fixed" investments, because they do not need to stand up to the same scrutiny. We need to protect the retirees of this world and make the drawbacks of products as upfront as the perceived benefits. There are no free lunches out there in the investment world, even if these salesman will buy the lunch in hopes the seniors will perceive there are, and sign on the doted line. Please PASS the Proposed Rule. The senior investors of this country deserve and need the protection.

Peter Washburn
Finn, Rodriguez & Washburn
Wealth Management - Retirement Planning