November 14, 2008
Dear Sir or Madam:
I am writing in favor and in support of the proposed Equity-Indexed Annuity Rule allowing for SEC oversight of indexed annuity sales in addition to the state oversight by insurance commissioners.
I have been active in the financial service industry for over 6 years. I am a member of NAPFA (National Association of Personal Financial Advisors) and the FPA (Financial Planning Association).
I have personally seen the losses many unsuspecting consumers have had to endure due to the abuses sales people have perpetrated in the sale of these complicated products. For instance, we had a consumer come to us totally lost on what her options were. She had been sold an equity-indexed annuity and began taking the Regulation 72-t distributions. She was not given advice on how to calculate her distribution amount. Her annuity was going to be liquidated before the five year period was up. She was literally sitting on a tax ticking time bomb.
There are several problems with the current regulation. First, some agents are misrepresenting themselves as offering a single retirement solution when in fact retirement planning is generally a complex planning process. Second, not all states have adopted suitability standards for annuity sales, nor do most insurance commissioners have adequate enforcement resources available. Third, liquidity risks, surrender charges, and other suitability factors are not always clearly disclosed or understood. Fourth, consumers are often misled regarding the benefits of an indexed annuity. Fifth, the vulnerable aging population needs additional protection from aggressive sales agents. Sixth, the rule is a reasonable and balanced approach to enhancing state enforcement efforts.
As evident in the above, America needs SEC oversight of indexed annuity sales in addition to the state oversight by insurance commissioners.
Respectfully,
Tiffany
Tiffany B. Ballard, CFP®, AIF®
NAPFA-Registered Financial Advisor