Subject: comments

July 8, 2008

I have been in the securities field since 1989. I don't want fixed insurance products such as Fixed Indexed Annuities to be regulated by the securities exchange. I have worked with several national brokerage firms. Their biggest concern seems to be, what's in it for them. Not the clients. The brokarages and FINRA seem to want to get a piece of the action.

I already have to fill out extensive suitability forms for use with an FIA. I feel most of the companies who offer fixed annuities have some formal suitability procedure.

When I was working with Raymond James, they took NTM 0550 and used it to mandate all FIA's be done through them. Sounds ok, but they wanted to control what company I was able to work with. Their lack of understanding and desire to be paid, created a very short list of available FIA's that were not the "best in class". Their list was designed for the relationships they had with the insurance company, and the cut in the commissions they could regulate. It was a total failure. If I was to stay at RJ, I would have not been able to offer my insurance clients the full benefit of selecting from all of the contracts that were the best for my client!! I switched to a different brokerage firm. It was a lot of work and I missed out on production during the transfer.
My FMO who helps me with FIA's has been selected BY ME. They are the organization that offers the best education and product line for my clients. For everyone's sake who owns these things or sells them, keep the securities dealers out of it. Its none of their business.
The pricing on FIA's is also going to be hurt. Current models offer reasonable rates of return that are generally competitive with CD's and other fixed investments. Having the brokerage firm get involved is confusing to the clients, because its backing is not about stocks, and it takes the knowledgeable marketing organizations out of the picture, and replaces them with securities politicians. Thanks for reading my comments.
Tim Holt
California