NASD Completely Out of Line With EIA Webcast

The NASD is now taking on the task of trying to teach its members, in minute detail, about EIAs through the use of a Webcast, presented with all the enthusiasm and energy of a dead fish. But aside from the lifeless way this material on their site is presented, it is wrong of the NASD to even address this topic for two major reasons. First, the NASD does not have ANY regulatory authority over EIAs and therefore has neither the responsibility to educate their registered reps about them, nor the RIGHT to discuss them with such detail, as if they did. I wonder how the NASD would like it if insurance departments, suddenly began to discuss and attempt to educate registered insurance agents about securities products in the same manner the NASD has been forcing their way into talking about the sale of annuities. The SEC is SO controlling when it comes to the regulation of securities, and the NASD, as the self-regulatory body for registered reps, is even more reactionary to any variance from an extremely well defined set of rules and regulations that govern the sale of every securities product. So how is it that the pubic figure heads for this same organization keep illegally calling indexed annuities investments, when a registered representative of the same organization is forbidden by law to call any non-security product an investment? The second reason, this web posting about EIAs by the NASD is out of line, is that they attempt to summarize and explain ALL of the variations of EIA product designs at once. Imagine them trying to explain ALL of the variations of every mutual fund, including all the differences in fees, internal design, and investment objectives, in a single 7 ½ minute video. It is no more necessary that a client understand every possible EIA available in order to make an informed decision about buying one, than it would be for a client to fully comprehend every single mutual fund available before choosing to buy one of them. Part of the agent’s job is to sift through the enormous number of offerings in either of these product lines, and then present the client one or two best matches, based upon their ethical professional judgment and their evaluation of suitability based upon the stated financial objectives of the client. For mutual funds, the broker dealers, the mutual fund companies, and the NASD should be the ones that provide the educational information the agent needs in order to do their job properly. Similarly, the insurance companies, GAs or FMOs, and the state insurance departments, and NOT the NASD are the ones who should be doing all the educating for licensed insurance agents about the details of indexed annuities. And the fact that SOME insurance agents offering EIAs may also be registered reps does NOT give the NASD ANY right or responsibility to intrude into the business of EIAs, any more than then insurance departments have a right to intrude into the business of securities products because an insurance agent is also a registered rep.