November 13, 2008
My name is Linda Townsend and I am a registered representative with Waterstone Financial Group. I have been in the financial planning business for 7 years.
I support the adoption of the proposed rules for regulation and oversight for the index annuity business.
The reason is that I have yet to meet with a single client who had previously purchased an equity indexed annuity and who had any idea how it really worked. No one has yet been able to demonstrate that they have any understanding of how the product they purchased might benefit them, what the limitations are, etc. The most abusive case I've seen is a 78 year old widow (now age 82) who was "sold" 12 different EIAs (all from Allianz and North American) with as many as 14 years of surrender charges (starting as high as 22%!) limiting her ability to access her own money for lifestyle needs. I have recently been asked by her family to assist in filing a formal complaint with the Illinois Dept of Insurance against both the writing agent and Allianz.
Time and again I have seen how the vulnerable elderly population needs protection from aggressive sales agents who represent themselves as financial advisors. Consumers are consistently mislead regarding the benefits of an indexed annuity and they have no grasp of liquidity risks, surrender charges, and other suitability factors. Retirement planning is always a complex planning process and the agents who deal almost exclusively in EIAs are doing a disservice to vulnerable retirees because they fall back on the most lucrative (for them!) tool in their toolbox regardless of the client's needs.
Linda Townsend, RFC.
Waterstone Financial Group
Planning Dynamics, Inc.