November 17, 2008

Subject: File No. S7-14-08

I write in favor of the proposed rule to classify indexed annuities as securities.

I have spent nearly 24 years in the financial services industry as a financial planner and investment advisor. I own a broker-dealer, an RIA and an insurance brokerage entity. I hold series 7, 24, 27, 63 and 65 licenses, in addition to the Certified Financial Planner designation.

My concerns about the current classification of indexed annuities as an insurance product only are as follows:

1. The products are complex, involving to a significant degree investment concepts like various worldwide market indices, but they are being sold by individuals who may not have passed any type of investment or securities licensing.
2. I am fearful that inadequate disclosure of Contingent Deferred Sales Charge amounts and timeframes is likely being made. We saw this with variable annuities in the early 2000s, and most broker-dealers made changes in procedures to demonstrate that the disclosures are being made. With no systematic procedural approach in the insurance business, I am fearful that consumers are not fully aware of these material facts.
3. FINRA as a national regulatory organization is in a better position to oversee these vehicles than the patchwork of state insurance commissioners and regulators.
4. I am also fearful that many insurance agents may not be representing the full spectrum of retirement planning options and vehicles to clients, and particularly vulnerable senior citizens.

Thanks for your consideration.

Sincerely,

Timothy L. Smith, CFP (R)
President, The Comprehensive Group