November 14, 2008
Dear Sir or Madam,
I'm a principal of an independent Registered Investment Advisory firm, in business since 1990. Until earlier this year, I was also a registered representative clearning through an independent broker-dealer. I've been insurance-licensed since 1979, so I've got extensive experience with both securities and annuiities. I am a Certified Financial Planner (CFP), a Certified Investment Management Analyst (CIMAj), a Chartered Life Underwriter (CLU) and a Chartered Financial Consultant (ChFC). Having taken ten or more courses through The American College, the educational arm of the insurance industry, I believe I am well-informed about insurance contracts in general.
I am entirely in favor of the SEC expanding its regulatory mandate to include equity-indexed annuities. In my practice, we frequently encounter prospective clients, especially aging individuals and couples, who have been sold equity-indexed annuities that, in my informed opinion, are wholly inappropriate. My e-mail inbox receives about three e-mails a week soliciting me to market equity-indexed annuities, often referencing extremely high commission payouts.
Regulation is imperfect, but to me this is clearly a case where the balance between the potential economic benefits of these contracts to buyers and the abuse so frequently inherent in their sale absolutely requires enhanced Federal-level regulation in the public interest.
Sincerely,
James S. Hemphill, CFP ChFC CIMA
Managing Director
TGS Financial Advisors
A Registered Investment Advisor