November 15, 2008
My name is Scott Preston I am an IAR with Multi-Financial Securities Corp. I hold a series 7, 24, Life/health licenses. I have been practicing since March 1998 and the majority of products I sell are fixed indexed annuities. They appeal to ALL ages.
As of today, the 15th of November, the market is down over 33%! This also equates to many people having their 401 K, IRA, or brokerage accounts suffering as well; except one group. My clients in the equity-indexed annuity HAVE NOT LOST A DIME!!!
How can this be labeled a security as there is no loss to principal due to market performance? Yes there are surrender charges, but they also exist in variable annuities and mutual funds, however these products can and do lose principal.
Any rogue sales practices can happen with any product. Just look at the housing problem we're having now. Did some mortgage brokers place people in loans they couldn't afford? Yes. Those brokers do not have a securities license.
I see no reason as to why this product should be labeled a security.
Scott D Preston