November 13, 2008
SEC Commission,
I add my voice to those urging you to vote in favor of File No. S7-14-08, the proposal regarding oversight of the sale of equity indexed annuities. As fee-only financial planners, my husband/partner and I have seen shocking abuses of the sale of these products. When insurance sales people identify themselves as “retirement planners” or “financial planners,” the average consumer believes his or her own best interests will be served. Instead, we have seen indexed annuity products so complex and convoluted that no one could possibly verify whether the resulting returns were calculated properly. Some products base future returns in ways that resign consumers to suffering the downside of markets like we are currently experiencing while they limit the upside to reward the insurance company disproportionately. In addition, some of the sales materials we have seen cherry pick historical returns to suggest future returns that are unlikely at best and in many cases almost certainly impossible. Even savvy clients of ours have been unaware of the high fees and crippling surrender costs associated with these products they purchased in good faith. Consumers work hard to accumulate retirement savings, and it is disheartening when they are duped by unscrupulous sales people masquerading as financial advisors. People have developed specific job skills to earn their nest eggs; they should not be required to become insurance and investment experts in order to determine how to plan for their retirements. The financial services industry and the Securities and Exchange Commission in particular must provide protections against ruthless and unconscionable sales practices.
I am a fee-only financial planner, a CFP® practitioner who acts as a fiduciary for my clients, putting their interests ahead of my own. I am a member of the Financial Planning Association, a professional organization that strenuously protects the right of consumers. As a concerned professional, I ask you to please vote in favor of File No. S7-14-08.
Jean Mote, CFP®
Mote Wealth Management, LLC
Fee-Only Financial Planning