November 14, 2008
My name is Lance Belline and a member of the FPA and I strongly support the proposed rule. I obtained my CFP designation in 2002 and have been working in the financial services industry since 1994.
I recently had a client who is 72 that I got a alert that he was going to transfer his IRA to a insurance company which I knew was known for their Equity Index Annuity sales. When I met with the client to discuss he mentioned that he was guaranteed a 6% return and he was going to get 10% bonus for transferring his money. As a positive he was aware of the 14 year contingent withdrawal charge (much to my surprise). I made him aware that the 6% was a withdrawal benefit feature and not what his money would grow at and educated him on all the moving parts (point to point caps, monthly average caps,etc..) and I also got his son involved and fortunately the client decided to reverse the transfer.
I support rule # S7-14-08 because
* the rule is a reasonable and balanced approach to enhancing state enforcement efforts
* the vulnerable aging population needs additional protection from aggressive sales agents
* consumers are often mislead regarding the benefits of an indexed annuity
* 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
* some agents misrepresent themselves as offering a single retirement solution when in fact retirement planning is generally a complex planning process
Sincerely,
Lance
R. Lance Belline, CFP
AXA Advisors