From: James R. Lester
Sent: August 15, 2006
Subject: File No. SR-NASD-2004-183

This comment is in addition to the one sent earlier. I have been an agent in the life insurance and securities business for over 30 (thirty) years and I offer each of my prospective clients a choice between mutual funds and annuities, both fixed and variable. More than half choose annuities. One of the reasons is that the U.S. has mostly done away with the Pension Plans that gave the average American the security of never running out of money. Mutual Funds do not do this. The annuity is the only product that does. It also guarantees the beneficiary, usually the spouse, that if the market goes down, their principal is still preserved. Mutual funds do not do this. Agents and Reps have gotten enough extra paperwork from various governing agencies to choke a cow. We don't need any more, and our client's choices will be affected by the propensity not to offer these products. If you must do something, don't impose additional rules on the 99.5% (ninety-nine and one-half percent) of the sales people out in the field. I urge you to go after the .005 of the sales people who are causing problems for everyone. One example would be to require Insurance companies and Branch managers to report ALL annuity sales where a premature sales charge was paid when a client changed annuities. This should not be too hard! It would be much more effective, since you would eliminate your time searching for problems among 99.5% of the sales people and focus on the one-half percent who are bad apples.

James R. Lester, CLU, ChFC.