November 14, 2008
I support the proposed Equity-Indexed Annuity Rule.
I am a Certified Financial Planner practitioner with thirty years experience in financial services. After hearing about Equity-Indexed Annuities some years ago I attended a one-day training by a leading product sponsor. The "training" was heavily focused on the benefits to the sales person, including very high compensation, and client retention as a result of long surrender charges. At the end of the day I compared their products to other financial products available in the industry, and personally concluded that these EIAs would never find a place in my practice.
After reviewing about ten sales of Equity-Indexed Annuities by other folks, I have yet to find a client that understood what they owned, or was satisfied that their returns met their expectations. The last one was an elderly (I can’t remember one that wasn’t elderly) person that needed access to more than the maximum allowable amount annually. According to this person, the agent that sold this to her knew her well, and her cash flow needs, yet still suggested that she move ALL of her money from CDs and Money Market accounts at the bank into this limited liquidity vehicle.
Steve Sant, CFP®
Sant, McMahon & Sparks, LLC