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U.S. Securities and Exchange Commission

The following Letter Type C, or variations thereof, was submitted by individuals or entities.

Letter Type C:

In reference to File Number SR-NASD-2004-183, Amendment Number 2:

Regarding the implementation of further regulation of Variable Annuity contract sales to investors, the paramount question comes to mind: Don't we already go through all this to get licensed, trained, annual fulfillment of continuing education requirements, and principal and broker/dealer supervisory regulation to top it off, as well as any other professional financial advisor credentials one goes through?

Do doctors and lawyers now check with their regulatory bodies about the recommendations they're making to their patients and clients, or do you give them the respect of their degree and training and therefore assume a certain amount of competence to make recommendations within their realm of patient health care or client needs? Why are we, as financial planners, subject to such redundancy, and control, when these other professions are dealing with serious matters as well. Not that we, as professional financial planners, want to flag other professions for their regulatory practices or lack thereof, but we are starting to think this regulatory overkill of our industry is discriminatory.

We, as independent financial planners, are already doing all that this proposed bill addresses, so to add more forms to the process to fatten our files is actually counterproductive for many reasons but the major one would be more overhead costs to produce and maintain these forms requiring additional staffing, more office and storage space, and clients wont' be any better off because they trust their advisor or they don't do business with them. Signing a form(s) won't stop greedy brokers from recommending inappropriate investments, anymore than gun laws stop gun crime (i.e. Boston, MA and daily murders by guns - "gun buyback program" and we have stringent gun laws as well). 2) Clients sign disclosure documents now, and of course, requirements to "know your client" already requires us to gather personal information such as age, financial wealth, goals, etc. We must also update this information every three years as well. 3) Our broker/dealer already reviews all variable annuity sales and exchanges, and we must justify to them that our client is suited for this new investment or better off if they're exchanging an existing annuity for another one in terms of cost (lower M&E), benefits (adding living benefits as an example where there weren't any available on the original annuity). We, as an independent firm, are too small to invest in technology that would duplicate this oversight, but our firm's principals review all variable annuity applications now as part of their responsibility. To add more features to their burden they would need additional staff and give up their own careers as financial planners.

Although insurance industry has done a much better job of publishing laymen friendly literature to disclose all points, benefits and costs of variable annuities, we realize that just reading the brochure and prospectus isn't enough for the investing public, they still need us to explain variable annuities to them. It is our financial planning and investment expertise that synthesizes client needs/wants with specific financial products to fulfill these needs… clients can't get that from a brochure.

After all the continuing education we, as financial planners, go through on an ongoing, annual basis, and adhering to the highest standards of professional practice, and going through all the steps to ensure the client knows exactly what they are investing in and all the nuances of these contracts, please stop trying to put us into a straight jacket. Go after the crooks, not us. We do all that you have required us to do so don't make this job impossible…you'll just legislate us out of business.


Modified: 07/19/2006