November 13, 2008

Subject: File No. S7-14-08 Indexed Annuities

I am a member of FPA and a Certified Financial Planner in the State of Oregon. I have been practicing in the field of Financial Planning in various stages since 1992. I have seen many outrageous and stupid things done by "financial advisors" who hold themselves out to be exports but can't even acquire proper licensing to be able to offer their clients all the products and resources available.

From what I have seen is Indexed Annuities are sold buy life only agents who don't have the ability to offer variable products. Commissions on the Indexed products are huge and the upside potential for clients is rather limited. One of my clients had their Variable Annuity replaced which had a 6% income rider on it with an indexed annuity. After we got together with the client and figured out the market needed to return 18% per year for them to receive the same potential as the 6% income rider we got the client back into the VA with the free look. The index does protect against downside but really limits upside. There are so many other areas we can use. Structured CD's, notes, Variable annuities etc.

I have seen one product sold which had "no surrender fee's". 90% of the clients money went to work in the product from day one at the minimum 3%. When I explained to the rep that the surrender fee was built in and was 10% from day one they were shocked.

We need to make sure that the people selling Indexed annuities are doing so because they are the best thing for the client. Not because it's the only thing they can sell. The rule that is proposed would make indexed annuities fall in the licensing or similar as required for VA's. Lets face it. Why does someone need a series 7 license to sell a structured FDIC insured CD when an indexed annuity can be sold by any Joe Schmoe with an insurance license.

Let's clean up the industry and make it more even across the board.

I would love to see a national insurance division rather than each state. Uniformity is key.

thanks,

Sincerely,

Theodore B. Erickson, CFP
TLC Federal Credit Union
LPL Financial Services