ATTORNEY NEWSLETTER

Annuity Sales Commissions: A Closer Look

Broker Dealers Cracking Down

Annuity sales generate large commissions, often around 10% or more of premium. And the size of the commission is only part of the story. The well-kept secret (among salespeople) is that the longer the surrender charge period (i.e., the longer you’re penalized for withdrawing your own money) the higher the commission. Nice, huh? And the other secret is that brokers who sell annuities have historically been allowed to pocket commissions off the books of their broker-dealer employer, because – wait for it – annuities are not registered securities. That is, annuities are not what brokers are trained and registered to sell. If you or a loved one has purchased an unsuitable annuity or have been the victim of annuity or securities fraud, please contact the Evans Law Firm at (415)441-8669, and we can help.

Much of the murkiness surrounding annuity advice and commissions is about to change, however, in ripples from an unlikely corner – the Department of Labor (DOL). The DOL is considering a “fiduciary rule” that would hold thousands of retirement plan brokers/advisors to a higher standard when giving advice on retirement investments and plans. The Trump Administration has delayed implementation of the rule, but broker dealers are going ahead with their own guidelines nevertheless. Just the talk of the heightened standard created a new dynamic within the financial industry and closer monitoring of financial advice – and commissions – looks like it’s here to stay. As broker dealer firms look more closely at the advice their reps give, they will also keep an eye on the sales commissions they reap.

Both initiatives are good news for the consumer. The fiduciary rule would require brokers and agents to put their client’s interests first in recommendations of any retirement investment vehicle, including indexed annuities. Essentially, a fiduciary is a person or organization that owes to another duties of good faith and trust. The highest legal duty of one party to another, it also involves being bound ethically to act in the other’s best interests. Whether the DOL fiduciary rule becomes law remains to be seen. In the interim, talk of it alone is revolutionizing the investment world.

Contact Us

If you or a loved one purchased an annuity, life insurance policy, or other investment contract from which you or a loved one has experienced a financial loss (beyond that of reasonable investment risk) in Marin County or anywhere in California, contact the Evans Law Firm annuities, financial elder abuse, and fraud attorneys at (415) 441-8669, or by email at info@evanslaw.com. Our attorneys have experience with annuities, life insurance, and large insurance companies. We can help guide your case through a jury trial, FINRA arbitration, or toward an equitable settlement. We handle cases involving physical and financial elder abuse, qui tam and whistleblower law, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.
Some of the major annuity and life insurance providers in California are:

• Aviva/Athene/Accordia Life Insurance Company
• Transamerica Life Insurance Company
• John Hancock Life Insurance Company
• Bankers Life Insurance and Casualty company
• Massachusetts Mutual Life Insurance Company
• Midland Life Insurance Company
• North American Company for Life and Health Insurance
• Pacific Life Insurance Company
• Prudential Life Insurance Company
• Genworth Life Insurance Company
• ING USA Annuity and Life Insurance Company
• Lincoln Benefit Life Company
• Metlife/Metropolitan Life Insurance Company
• Unum Life Insurance Company of America
• Voya/Reliastar Life Insurance Company