Annuities are a form of life insurance that provide a lump sum
payment upon death and a tax deferred investments usually in form of
mutual funds.
The high up front commissions and on-going fees associated with
annuities that are not disclosed to the purchaser, along with secret
incentives for brokers to sell them, has created problems for
consumers and the industry for failure to disclose those fees.
Seniors are particularly vulnerable, as these are not liquid assets
and early withdrawal of funds comes at a hefty price.
Many have been sold with the assurance they are "safe."
Investments always have a degree of risk. Never let anyone
tell you otherwise no matter the instrument they are trying to sell.
Know the risks before you buy. And do your own research, don't
rely on the seller.
The
Financial Industry Regulatory Authority is a good place to get
more information. The links below are a sample.
Broker Check - Inquiry form to check the status of your broker.
FINRA Fines ICAP $2.8 Million, Fines and Suspends Former Broker for
Improper Communications with Other Interdealer Brokers About
Customers' Brokerage Rate Negotiations in Wholesale CDS
Market—6/30/09
FINRA Fines Fifth Third Securities $1.75 Million for 250 Unsuitable
Variable Annuities Transactions
Disciplinary Actions take by FINRA (not searchable)
In May of 2003, the National Association of Securities Dealers
(NASD) issued an alert regarding Annuities Fraud:
"The marketing efforts used by some variable annuity sellers deserve
scrutiny — especially when seniors are the targeted investors. Sales
pitches for these products might attempt to scare or confuse
investors. One scare tactic used with seniors is to claim that a
variable annuity will protect them from lawsuits or seizures of
their assets. Many such claims are not based on facts, but
nevertheless help land a sale.
"While variable annuities can be appropriate as an investment under
the right circumstances, as an investor, you should be aware of
their restrictive features, understand that substantial taxes and
charges may apply if you withdraw your money early, and guard
against fear-inducing sales tactics."
We are dedicated to aggressively recovering annuities losses and
stock market losses caused by brokerage firms and investment
counselors.