November 13, 2008
I am writing in support of the SEC governance over annuities. I am a current CFP® practitioner with over 14 years experience in wealth management. I too offer annuities as a product in my practice. Over the last 10 years as the popularity of the indexed and variable annuities have increased, I have seen extreme abuses within our industry. I am often faced with clients who were sold and annuity where the liquidity, taxes and fees that were associated with these were not disclosed properly. Typically these are in the form of an IRA which if compared side-by-side with a non-insurance products have many of the same features however with additional fees assessed and also limited investment offerings. There are several cases where a client would pay 7% to 10% if they liquidated their annuity in deferred sales charges in addition to taxes and penalties. I've heard over and over again if they had known this was the case they never would have bought the product. With additional recent regulation that has been brought on by the insurance and compliance industry I still do not see the requirements of its disclosure that need to be in place for anybody who offers this type of product. These products should also be fully scrutinized for their applicable nature as there are agents who are using annuities as college funding vehicles, retirement accounts, even for savings accounts in some cases. This is not appropriate.
It is my belief that the rule that you are proposing is reasonable and that the vulnerable aging population needs additional protection from aggressive sales agents. The states simply are not adopting enough standards and are not regulating them properly. Please consider my opinion when putting this rule Into effect.
Sharing Your Goals,
Staci Scharadin, CFP® Professional
President
WallStreet Wealth Management