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July 01, 2008 at 08:00 PM
It’s been nearly a week since the Securities and Exchange Commission voted 3-0 to define equity indexed annuities as securities and I have a question to ask: Are you strapped in tight for the SEC rollercoaster?
Who knows how this will play out? Authors of the 96-page SEC report came on strong and confident in their comments last week. Opponents have told me the paper has more holes in it than a pack of Swiss cheese.
Although talk of this initiative has been bandied about for at least the last two years, our industry has been abuzz since the SEC proposal hit the public. I’ve talked with industry insiders and found a myriad of emotions and opinions — everything from elation to frustration.
Mostly, though, I’ve been hearing a lot of questions as advisors, wholesalers and carriers try to get their arms around this proposal and figure out if it will go through, and what the impact will be to their bottom line and the way they do business. One thing I have heard on a consistent basis is that indexed annuities remain a viable product and should still be sold by advisors. As one industry insider put it: “For now, it’s business as usual.”
Senior Market Advisor‘s managing editor, Andy Stonehouse, wrote about the issue when the news broke last week. Per his findings, SEC commissioner Christopher Cox points to “abusive sales practices” as his motivation for pushing for this change regarding EIAs.
