November 17, 2008

Subject: File No S7-14-08

Florence Harmon
Acting Secretary
US Securities and Exchange Commission
100 F Street, NE
Washington DC 20549

RE: File No. S7-14-08

Dear Ms. Harmon:

I am a Certified Financial Planner and member of the Financial Planning Association. I support the SEC’s proposed rule 151, on the SEC oversight of index annuity sales in addition to current state oversight by Insurance Commissioners.

As a practicing fee only financial planner with over 10 years experience, I have seen many cases of abuse concerning the sales of annuities. I have acquired clients who were sold annuities that were not suitable for their situation. I have seen cases where clients were sold annuities that included the following abusive sales practices:

• Variable annuities being used to invest IRA funds which are already tax deferred. Often done to receive larger commissions. Higher fees and less investment choices result for the client.
   
• Sales literature and brochures for variable annuities that were misleading and confusing
   
• Liquidity issues of putting most of a client’s assets into annuities which require paying surrender charges to meet unexpected cash flow needs. This is particularly a problem for clients in retirement.
   
• Suitability- Simply selling a variable annuity when the time, age or other factors are such, that it would preclude a reputable selling agent from recommending a variable annuity.
   
• Selling annuity products as a tool for Medicaid planning. By placing all assets into annuities, shelters are created.
   
• Not disclosing surrender charges and the number of years surrender charges will apply.
   
• Not disclosing the additional fees associated with a variable annuities over stocks, or mutual funds.
   
• Agents not disclosing commissions received when asked by the client.
   
• Variable annuities being sold by agents as a means to avoid “breakpoints” or reduced commission that would apply for mutual funds. (Typically when buying mutual funds commission percentages become reduced usually starting around $100,000)
   

The financial industry needs more regulation that will protect unsuspecting consumers from fraudulent and unethical agents who do not put their clients best interest first. The proposed rule is a step in the right direction. Not all states have adopted suitability standards for annuities and often Insurance Commissioners have inadequate enforcement resources available. Having the SEC as an additional oversight is necessary to protect consumers. If Insurance agents and companies do not support this additional oversight I can only conclude that their profits are more important than integrity.

Respectfully submitted,

Becky H. Salsburg, CFP®