Beware of the Non-Registered Security Label for Indexed Annuities

One of the side effects of the propaganda campaign the NASD is using against indexed annuities is an indirect means to discredit their validity in the financial marketplace. The way in which this is methodically being done will take some time, using several well planned steps. While reading an article on MSN online about the Top 10 investing scams, it became clear to me just how this discrediting scheme is playing out. The first steps have already been launched, as Glauber has started a “misuse of terms” that is trying to mislabel indexed annuities as investments or securities. I have rebutted this use of terms on technical grounds and the fact that these products are legally recognized as insurance products only. But the public misperception, when these incorrect labels are applied, is the side effect I want to warn you about. As the securities industry justifiably gets its own share of “bad press” for the illegal and unethical actions of a number of brokers, fund managers, brokerage houses, and major corporations, any connection to these negative practices can have devastating credibility consequences. The securities industry is beginning a public awareness campaign that is encouraging investors to make sure that both the investment products they purchase, as well as the brokers they use to purchase securities, are properly registered. As a basic fact, this is good advice; however, when you have mislead the public into thinking that indexed annuities are investments or securities, then the misapplication of this advice, in regards to a fixed or indexed annuity, falsely implies that both, this perfectly legitimate insurance product, and, the licensed insurance agents who sell it, must be bogus, and operating a scam of improperly selling non-registered products. We need to continue to insist that, in every mention, indexed annuities are properly identified as insurance products that are completely regulated under the authority of each state insurance department and have nothing to do with the SEC or the NASD.