Annuity question (what to do, what to do...)

[cj]

Hi all,

I've posted this on the Morningstar site, but also appreciate the wisdom on this site, so maybe someone here can help.* I am working at unwinding some questionable investments sold to my 73-74 year old parents (Wachovia Securities is the offending party).* The last thing to be dealt with is a variable annuity sold to them last year (you heard me right, last year).* It's the "Equitable Accumulator Plus".* Someone sent me a link to the SEC site where the prospectus lives.* From what I can tell:

1.* The surrender charge is currently 8%
2.* It looks like they can take 15% out per year without penalty.
3.* Reading the prospectus, there are fees and charges all over the place.* I have no idea what the total charges are yearly.
4.* The investments within the annuity are mostly small- and mid-cap funds.
5.* This annuity represents probably 15% of their total investments.

I thought at first they should just annuitize the thing over the shortest period they could, but if I'm reading the prospectus correctly, they can't annuitize it until 5 years after they bought it.* The folks told me they told the saleswoman that they wanted this money in a few years, so this kind of ticks me off.* *

They have really flinched at paying the 8% surrender, and I can't blame them.* I'm thinking of suggesting they:

1.* Change the funds within the annuity to make them less aggressive.* It looks like they can do this without charge.
2.* Start taking the 15% per year out immediately
3.* After a couple of years when the surrender charge is not quite so severe, yank out the rest.

Is anyone out there familiar with this particular product?* Any opinions, comments, suggestions?

Thanks!!
CJ