November 14, 2008

Subject: "File No. S7-14-08

Dear SEC,

It is time to increase regulation and oversight in the sale of equity indexed annuities. The misrepresentations and misunderstandings of this product on both sides of the sales table are huge. Proper education of the agent is needed. The salesman needs to be held to a higher standard of care in his presentation and should be required to fully know his product.

I have been in the financial planning business for 25 years. I am a registered rep with a Series 63, 7 and 24. I am a member of FPA and the Indiana and American Bar Associations. I also have the CFP and ChFC designations.

I have few memories in the last 25 years of product and investment abuse that come close to what I have seen in the marketing of the EIA. Those of my clients that report to me after a presentation overwhelmingly remember only one or two items of the presentation. They remember the 5-9% upfront bonus and that the 6% is guaranteed on top of that for 10 years. Did they notice the 15 year surrender charges? No. Did they notice the 6% was not guaranteed on monies withdrawn before 10 years? No. Did they notice that the cap on the indexing can be adjusted every year? No. Did they notice that they only get an 80% participation on any growth and that this number can also be changed by the insurance company? No. Did they notice the surrender charge on their current annuity that they will be moving to the new policy? Well, yes, but that is what the bonus amount is for.

It is time a product that walks like a duck, quacks like a duck and smells like a duck be treated like the investment security that it is.

Thank you,

Kenneth P. Schmidt, JD
Certified Financial Planner
Financial Planning Services