November 15, 2008
My name is Kathryn Lund and I am a CPA, a Certified Financial Planner, and a member of the FPA and of NAPFA. I am a fee-only financial planner and I strongly support the proposed rule that would allow for SEC oversight of indexed annuity sales in addition to state oversight by insurance commissioners.
Several of the clients that I work with have come to me after being sold products that are inappropriate to their circumstances by insurance agents who know and care very little about the client's circumstances. Clients are sold unsuitable, highly complex and expensive products on the basis of misleading and incomplete information and overly optimistic projections. The potential benefits of these products are over-emphasized, while the costs and potential problems are not properly disclosed. The complexity of these products makes it extremely difficult for the client to parse meaningful information out of the prospectuses, and marketing material can often be misleading. Problems with liquidity and high surrender charges are especially under-emphasized. Retirement planning involves many factors. These products may or may not fit the client needs, but often the agents selling them are presenting a one-size-fits-all approach.
At this time of economic uncertainty, people can be especially vulnerable to false claims of security with their money. We are experiencing the effects of lax and uncommitted regulation in financial markets. The proposed rule is a reasonable and balanced approach to enhancing state enforcement efforts, and I support it.
Sincerely,
Kathryn K. Lund
Kathryn K. Lund, CPA, CFP(R)
Mosaic Financial Advisors, LLC