July 17, 2008
For the past five years, I have been marketing index annuities to seniors.
During this time, I have seen dozens and dozens of retirement accounts with significant losses due to people following the advice of stock brokers, while the brokers continue to profit from the selling/buying they continued to handle for their clients.
Also during that time, I have never seen a retiree who purchased an index annuity lose even one cent, and have seen a high percentage who have made much higher-than-bank rates on their annuities. These clients have thanked me profusely--and none are unhappy.
Sure, there are some agents that have mis-represented these products, but the far larger majority are legitimately running their businesses--and there is a much larger group of registered reps who have committed acts that need, or have been, discipline(d).
Annuity products have always been insurance products. The addition of choice of method used to determine interest credited does not make it a security, especially since they can never get a negative credit. It seems clear to me that the desire of FINRA to include these within their oversight, so only registered reps can sell them, can only been seen as greed-motivated.
I would also ask: Is the SEC going to ask FINRA to oversee all kinds of businesses, in all categories, (i.e., not just financial) that have some "bad apples" in their fold?
Look at the absurdity of this proposal before you make a huge mistake with your recommendations. Please don't succumb to the "empire building" efforts of the securities industry.