October 20, 2008
I am disappointed that the SEC and Christopher Cox has indicated an "interest" in Regulating Fixed Indexed Annuities as a Security.
Fixed Annuities have served as the backbone of many Conservative Citizens retirement funding for decades. While many more citizens have turned to the Market for higher potential gains in recent years. The Fixed Annuity buyer has traditionally been a person more comfortable with Bank CD's and Money Market accounts. It is true that market collaspes in the 90's and 2000's has had the effect of some citizens seeking the safe harbor an Annuity can offer.
It has been my experience that consumer's turn to the insurance agent to place their funds out of the market volitility, looking for market like gains but without exposure to market fees, costs and potentially devastating losses. The insurance agent sells sleep insurance for those not likely to enjoy the ups and downs of Mutual Funds or Stocks.
I fear that if the stock broker and registered representative is the only source of these safety first products, they will be underoffered and not offered when it would be prudent to do so. After all, those tuned to the market driven investment, really believe these instruments are best and best for most people. I patentedly disagree with the concept for elders who cannot expect to live enough years to benefit CONSISTENTLY from this risk/reward scenario.
The concept is completely unique when the senior may "participate is market gains" and "avoid the risk of loss due to market declines" and understand that at a time of their direction, guarantee a fixed income for life.
These products and the marketing of these products is best left in the hands of professionals in the Insurance Industry who are accustomed to planning for the worst
and accomodating the needs of assurance and safety.
If this type of product is something stock broker's and mutual fund sales people wish to offer, I suggest that they simply apply for the necessary licences to do so.
Sincerely, Edward J Ogden