November 14, 2008
Dear Sirs:
I have been a fee-only financial planner for 11 years, am a NAPFA and FPA member, and a state registered investment advisor. I strongly endorse SEC oversight of equity-indexed annuities. My clients who have been sold EI annuities have the following complaints:
1. They did not understand this very complex product when they bought it
2. There was inadequate disclosure of expenses, risks, and surrender charges
This product is regulated by the states primarily as an insurance product. The proposed rule is a reasonable approach to balancing this enforcement focus by the states. Substantially more consumer protection is required on the investment side. I don't particularly like having two different agencies regulate a product, but this situation is so bad that there appears to be no other alternative.
Thank you,
Stephen Overstreet
Winter Springs, FL