From: Scott E. Bordelon, CFP, AAMS
Nancy M. Morris
Dear Ms. Morris,
I will keep my comments short and to the point. I have been a registered representative for over 25 years. My personal practice occasionally involves the recommendation and sale of VA's, however, it is not the primary part of my investment practice.
1.) Do we really need additional suitability guidelines for a single product type, such as variable annuities, when we already are subject to very stringent suitability requirements for all investment products? Why should VA's be any different?
2.) How would the NASD determine the suitability of specific criteria of suitability such as "Investment Experience" and "Intended use of Variable Annuity"? The proposed rule seems to leave this wide open for interpretation.
3.) How would we evidence the "Obligation to Inform Customers of the Material Features of the VA". Would a prospectus receipt suffice? Or would another disclosure document (sort of a prospectus for the prospectus)? This would imply that the prospectuses are just not working or that no one reads them.
4.) Also, as a General Securities Principal (supervisor), I would find it extremely difficult, if not impossible, to complete the proposed "Principal Review and Approval" within the 2 day time limit in ALL cases. This does not allow for mail time, processing time, vacations, holidays, any illnesses. The variable annuity already has a mandatory "free look" provision, unlike many other investments. Could not the time period for review and approval coincide with this existing "free look" time period?
5.) I am concerned that by placing additional regulation and rules, to already stringent rules, for a single product like variable annuities, it could limit their access to investors who could truly use the unique benefits that only a variable annuity can provide. Why not enforce the existing rules and require further and more clear disclosures in the variable annuity prospectus?
Thanks you in advance for the attention and consideration you give to my comments and concerns.
Scott E. Bordelon, CFP, AAMS
PH (985)893-1440 FAX (985)893-1450
Securities Offered through Mutual Service Corp. An NASD Registered Broker/Dealer. Financial & Investment Management Advisors, Inc. is not affiliated with Mutual Service Corporation