November 13, 2008

Subject: Support for Equity-Indexed Annuity Rule s7-14-08

Dear Sir/Madam,

I am a CFP since 1990 and with securities and life insurance licenses since 1987. I practice financial planning and am currently with an advisory firm. The greatest abuse in have seen in the planning industry is the sale and marketing of inappropriate annuity sales, especially equity indexed annuities. Please pass the new rule regarding their regulation.

To illustrate the insurance industry push to market these products I would call your attention to the annual survey of broker/dealers

published in the Financial Planning supplement produced by SourceMedia’s Custom Media Group for 2008. Most planners follow the ethical standard that call them to be fiduciaries of their clients interests. That would mean a more discriminating approach to

selling any annuity. The broker dealers having more CFP representatives, as a rule, sell fewer annuities. Examples to the contrary are insurance related broker dealers like AIG and New York Life (NYLife) Securities who have 50% of their production listed as

annuity income. This is far out of line with firms that go out of their way to do good financial planning where 10 – 15% of commissions paid are from annuity sales. These statistics should raise a lot of flags.

Indexed annuities are based on market performance that we are constantly monitoring for our mutual fund clients. There are

so many options for seniors that allow them a reasonable return while still in control of their assets in their latter years. These are issues where surrender charges can destroy a good plan. Many clients I have worked with do not have long term excess cash to justify placing assets in these products for ten years or more.

I believe this new rule can enhance greater disclosure and reduce marketing strategies that take advantage of those who do not see the negatives of these products. A subtle unspoken obligation through meal time seminars does influence those who are attend, especially widows. A one hour format does not cover information on the intricacy of indexed annuities products that buyers need to know for an informed purchase. They also rarely know the questions to ask. They see them like a certificate of deposit with a market rate bonus of some kind.

For your consideration,

Francis Norm Kredit, CFP®
Richey Advisors, Inc.