July 17, 2006
As a licensed rep, I sell both mutual funds & annuities. Each product has its specific uses. Annuities have higher charges but also offer guarantees that are not found in mutual funds or stocks. Proposed rule 2821 offers more duplication of rule 2310.
In this world of confusion on the part of the rep, what you you think it causes for the consumer. We're supposed to be the 'pros' in our industry. Adding more unnecessary paper work only causes more trees to be cut.
Whereas, rule 2310 covers ALL suitability for securities including variable annuities, why would anyone want to duplicate it?
Unfortunately, their are reps in our industry, just as all industries, that give it a bad name. These reps should be proscuted to the fullest amount of the law if found guilty of knowingly doing wrong.
I for one, and I'm sure all complanies & reps would vouch, consumers get lost in signing ALL of the paper work we already put in front of them even though it is explained when they are signing.
It fairly sad when the company has only a 2 - 4 pages application and the next 5 - 12 pages are disclaimer, switches, etc.
The best way to approach this situation is to follow the current rules and not add other 'similar' rules for anyone to remember, especially the OSJ's.
Hope this info helps in making a sounds judgement.
Norman H Cathell Jr.