Free Declaration - District Court of Arizona - Arizona

Bcchtold Declaration
Case 2:O2—cv—O2255—PGR Document 152 Filed O9/16/2005 Page1 0f4

William J. Maledon, Esq. (No. 3670)
OSBORN MALEDON PA
2929 North Central Avenue (Suite 2100)
Phoenix, Arizona 85012-2794
602 640-9331 (telephone)
602 640-6079 facsimile)
Peter K. Vigeland ro hac vice)
David W. Bowker ro hac vice)
WILMER CUTLER PICKERIN G HALE AND DORR LLP
399 Park Avenue
New York, New York 10022
212-230-8800 telephone)
212-230-8888 facsimile)
Attorneys for Defendant
American Express Financial Advisors Inc.
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
JOHN HARITOS, DAVID AND Case No.: No. 02-2255-PHX-PGR
EMILY AUSTIN, MICHAEL
TOOLEY, AND OMAR SHAHINE, on
behalf of themselves and All Others DECLARATION QF TIMQTHY v_
Similarly Situated, BECHTOLD
Plaintiffs,
(Assigned to
VS‘ The Hon. Paul G. Rosenblatt)
AMERICAN EXPRESS FINANCIAL
ADVISORS INC., a Delaware
corporation,
Defendant.
DECLARATION OF TIMOTHY V. BECHTOLD
I, Timothy V. Bechtold, declare and state as follows:
1. My name is Timothy V. Bechtold and I am presently the Vice President, Insurance
Products, for American Express Financial Advisors ("AEFA"), the defendant in the
USIDOCS S284904v2
Case 2:02—cv—02255—PGR Document 152 Filed O9/16/2005 Page 2 of 4

above captioned matter. I have held this position since January 1995. I also serve as the
President or Chief Executive Officer of the following affiliates of AEFA: IDS Life
Insurance Company, IDS Life of New York, and American Centurion Life Assurance
Company. As Vice President, Insurance Products, I am responsible for the sales and
profitability of all life products.
2. I submit this declaration to accompany AEFA’s Opposition to Plaintiffs’ Motion
for Class Certification. The statements in this declaration are based on my personal
knowledge and/or my review of AEFA’s records made in the ordinary course of AEFA’s
regularly conducted business activity. The matters set forth herein are true and correct to
the best of my knowledge.
3. AEF A offers its financial advisory clients investment opportunities in both fixed
and variable life insurance products. The fixed life insurance products include universal
life, whole life, and term life insurance. The variable life products include Variable
Universal Life ("VUL"), single premium variable life insurance and variable second to
die life insurance.
4. Both Platform l ("Pl") and Platform 2 ("P2") advisors are permitted to sell
proprietary and non-proprietary term insurance products. During the class period sales of
proprietary term products varied from approximately fifty-one percent to seventy-eight
percent. The remaining sales for term life were divided among non-proprietary term
products.
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5. Since February 22, 1993, senior financial advisors have been permitted to sell non-
proprietary universal life insurance policies with face amounts greater than $350,000.
I Since, August 1, 1997, senior financial advisors have been permitted to sell non-
proprietary VUL insurance policies with face amounts greater than $350,000.
6. VUL insurance policies tend to be complicated and take advisors substantial time
to sell and set up for a given client. Currently, for VUL insurance policies, clients may
choose from among 23 proprietary sub-accounts and 40 non-proprietary sub-accounts as
underlying investments. An advisor’s compensation does not differ regardless of whether
he or she recommends proprietary or non-proprietary sub-accounts as underlying
investments.
7. For the time period from January 1, 2004 through December 31, 2004,
approximately twenty-six percent of AEFA’s advisors did not sell any proprietary life
insurance products as part ofthe financial advisory service. Of the seventy-four percent
of advisors that did sell proprietary life insurance, the average number of policies sold
during 2004 was approximately 8.9 policies. Of the 8.9 policies sold, approximately four
were VUL insurance policies.
Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the foregoing is
true and correct to the best of my knowledge.
Executed this Qqziy of September, 2005 in Minneapolis, Minnesota.
Q é u...---···~
Timothy . Bechtold
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Bechtold Declaration

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