November 13, 2008
My name is Karl L. Hicks, CFP®, MBA. I am a practicing financial planner and a member of the Financial Planning Association (FPA). I have been serving in the financial services industry working directly with individuals for over 15 years. I have seen and worked with individuals who have purchase financial products that were not suitable to their particular circumstance on the basis of a misleading sales person seemingly focused on generating a commission for themselves. In some cases this has had a negative impact on the individual’s financial well being and plans and goals for their future.
I am sending this email in support of the Equity-Indexed Annuity Rule. FPA supports the rule as a means of helping to curb abusive sales practices, particularly aggressive and misleading sales tactics targeting the elderly and those who might be subject to these kinds of tactics. The rule is a reasonable and balanced approach to enhancing state enforcement efforts. The vulnerable the population needs additional protection from aggressive sales agents particularly in this economic times when individuals are seeking advice and guidance. Consumers are often misled regarding the benefits of an indexed annuity by those only looking to profit from the sale of such a product. Liquidity risks, surrender charges, and other suitability factors are not always clearly disclosed or understood. Not all states have adopted suitability standards for annuity sales, nor do most insurance commissioners have adequate enforcement resources available. And some agents misrepresent themselves as offering a single retirement solution when in fact retirement planning is generally a complex planning process.
Thank you for taking the time to review and consider my letter and filing it with the other comments you have received regarding this topic.
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Karl L. Hicks, CFP®, MBA
The Leonard Financial Group, LLC