June 22, 2017
The Honorable Senator Al Franken
309 Hart Senate Office Building
Washington, D.C. 20510
Re: Investment Adviser Protections for American Investors
Dear Senator Franken,
Despite its reluctant implementation this month, the U.S. Department of Labor’s Fiduciary Rule remains under attack, and we must not allow its unscrupulous opponents to prevail in their efforts to reverse or weaken this critical safeguard for American investors. Given your record as a Senate champion of consumer protection and individual retirement investors, I respectfully urge you to do the following:
- Oppose the Financial Choice Act, which, among other harms, would reverse outright the Fiduciary Rule’s conflict-of-interest protections, as it comes before the Senate;
- Remain vigilant over the Labor Department’s ongoing review of the Final Rule and its effect; and,
- Work to ensure that the Securities and Exchange Commission fulfills its role in protecting vulnerable and unsophisticated seniors and retirees from the predatory marketing practices of insurance companies, their marketing organizations, and agents who are seeking to undo the Rule’s fiduciary standard so they can continue to reap high commissions, bonuses, and rewards at the expense of unsuspecting investors.
Like you, I expressed my strong support for the Fiduciary Rule in a public comment on the Labor Department’s proposed delay on applicability of the Final Rule, which you can find here, as well as in an expert commentary published on Law360.com, which you can find here.
For years, independent marketing organizations (IMOs) and the insurance companies that back them systematically have misled investors by preying on their fears and forcing high-fee, complex proprietary fixed indexed annuities (FIAs) on them – regardless of whether the product was in the investors’ best interests. The designers of complex proprietary FIAs lure insurance agents with potentially high commissions and annual bonuses. They also incentivize IMOs marketing these complex proprietary FIAs with protected margins of commission and limited distribution models that ultimately hurt investors due to the deceptive marketing nature of these particular FIAs. The industry and its trade groups, in particular the National Association for Fixed Annuities (NAFA), whose members are storming Capitol Hill this week, are continuing to wage war against the Rule in an aggressive effort to overturn it through litigation, as well as public relations and lobbying campaigns.
The designers of these complex proprietary FIAs – Annexus Group, Market Synergy, and Innovative Design Group – and the insurance companies and distributors that back them – notably Nationwide Insurance Company, Security Benefit Insurance Company, Aviva Life & Annuity Company (recently acquired by Athene Insurance Company), Advisors Excel LLC, and Creative One Marketing Corporation – induce, or at a minimum, cause insurance agents to give investment advice without an investment license. They also commit source-of-funds violations by influencing the movement of money from securities into complex proprietary FIAs without the proper securities license, and potentially abuse the principle of past performance not being indicative of future results by using hypothetical illustrations to project non-guaranteed returns.
We must ensure that these unregulated, unscrupulous practices are permanently erased from the investment marketplace.
I share your passion and commitment to protecting American investors from misleading marketing practices and predatory sales practices as they relate to complex propriety annuity products. Having worked in this industry for decades, I am well-acquainted with those corrupt entities in the industry whose marketing presentations and instruments have a propensity to mislead.
I stand ready to offer my years of insight into the corrupt practices of IMOs and other insurers, including providing specific evidence of IMOs’ misleading marketing tactics and conversations to skirt regulatory scrutiny. Thank you for your consideration.
Respectfully yours,
Anil Vazirani (LUTCF)Member: BBB, NAIFA, NEB
Independent Insurance Advisor
Series 65 Investment Adviser Rep
2004 SSMP Hall of Fame Inductee
HS Dent Master Certified Member
MDRT Top of Table 10 YR Qualifier
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