November 17, 2008
My name is Mike "Cy" Cajthaml and I am a Certified Financial Planner Professional. I've been in this business for 21 years and am a member of the Financial Planning Association. I differ greatly from my association's stance on the SEC proposed Rule 151-A and am writing to give you my comments on said rule proposal. I DO NOT SUPPORT THE SEC AND THEIR EFFORTS TO TAKE CONTROL OF AN INSURANCE BASED PRODUCT! The Fixed-Indexed Annuity is clearly an insurance product and is not, in any way, a security! In my opinion, the SEC has clearly over-stepped its authority and I hope you will recognize that there is abuse of our fine senior citizens in both the insurance and securities area. I can't tell you how many times in my 21 year career I have seen the elderly lose portions of their hard earned assets in the market when their FINRA (NASD) Registered Representative had them fully invested in the market when they clearly should have had a majotity, if not all of their assets, in safe, secure savings type of vehicles. There is plenty of blame to spread around when it comes to unsuitable sales and taking these products under the wing of the SEC will definitely NOT curb any abusive practices. If you are not aware... a client's assets are not going backwards in a Fixed-Indexed Annuity like they would had they invested in the market! How can this be a bad thing for someone that is past age 65 who is depending on those assets to be safe and secure? There are also Guaranteed Living Benefit Withdrawal riders available on a number of the annuity-type of products ( as there are on Variable Annuities... a security ) which can be very beneficial to the elderly when depending on their assets to provide an income stream they cannot outlive. I'm just saying that there are a number of "bad-apples" on both sides and I think it would be a mistake to move Fixed-Indexed Annuities to the world of "investments" and place them in control of the SEC as they have enough problems of their own. The States are doing a good job and with all this turmoil I'm confident they will step-it-up even more. I believe the individual carriers will also do their best to assure a suitable sale takes place in the majority of cases. I'm very concerned as to just who is going to go after all the investment reps. that lost huge sums of their elderly clients money in this most recent market downturn? I'm sure the SEC has their hands full with trying to police their own ranks. Thanks for taking the time to consider my comments.
Mike "Cy" Cajthaml, CFP
Mike "Cy" Cajthaml, CFP®
Senior Vice President
Tailor Made