ATTORNEY NEWSLETTER
Broker Pushed More Expensive Variable Annuities
L-Share and B-Share Variable Annuities
Not all variable annuities are the same. Carriers offer B-share contracts with long surrender charge periods and L-share policies with shorter surrender periods but higher fees and commissions. Both types of variable annuities may be inappropriate for investors but especially the more expensive L-shares. The California securities and financial elder abuse lawyers at Evans Law Firm, Inc. represent clients, especially seniors, who suffer losses, including from high fees, surrender penalties and taxes, on inappropriate or unsuitable annuities such as L-share variable annuities. If you or a loved has suffered a surrender penalty or tax loss on an annuity surrender or paid high fees for an unsuitable policy, including L Share annuities, call us today at (415)441-8669 for a free review of the terms of your annuity.
The Financial Industry Regulatory Authority (FINRA) recently fined broker dealer Securities America Inc. for failing to supervise suitability rules concerning the two types of variable annuities.[1] FINRA’s suitability criteria require a broker to consider “the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs and risk tolerance” when recommending investments appropriate (“suitable”) for any consumer.
FINRA found that over a two-year period Securities America brokers violated or overlooked suitability criteria, resulting in more sales of expensive L-share contracts than would have occurred had brokers adhered to suitability guidelines. In other words, brokers were selling financial products that were not good for the consumer in order to earn large commissions and make a bigger profit on each sale. Securities America has not responded publicly to the FINRA investigation or fine.
A final word of caution on variable annuities. In low-interest rate environments, brokers, insurance agents and investment advisors push B-share and L-share variable annuities as a way to get more bang for your buck when it comes to retirement savings. Be very careful. These products are risky and complicated and agents often misrepresent the value of these contracts or fail to explain all of the fees and risks involved. Any deferred annuity will tie up your money for years and you won’t be able to get out without paying a surrender penalty and most likely a tax bill. Always consult a professional with nothing to gain from your purchase and review any proposals with your tax advisor.
Contact Us
If you or a loved one lives in California, is over 60, and been sold an unsuitable or inappropriate variable or fixed annuity or suffered loss on a surrender or replacement, contact Ingrid M. Evans and the other California and San Francisco securities, financial elder abuse and annuity and life insurance attorneys at Evans Law Firm (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our attorneys have experience with complex financial contracts and large insurance companies. We can help guide your case through a jury trial or toward an equitable settlement. We also 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.
Leading providers and distributors of life insurance and annuities, including variable and fixed indexed annuities, in California are listed below. We are not in any way suggesting that any of these carriers or distributors has done anything wrong. Rather, the list is provided solely as a reference for our readers.
AIG/American General Life Insurance Company
Allianz Life Insurance Company of North America
American Equity Investment Life Insurance Company
American General Life Insurance Company/AIG
American National Life Insurance Company
Ameriprise Financial/RiverSource Life Insurance Company
Ameriprise Financial/Securities America, Inc.
Athene Annuity & life Assurance Company
Athene Annuity and Life Company
Athene USA
Aviva Life Insurance Company
AXA Equitable Life Insurance Company/AXA US
Bankers Life Insurance and Casualty Company
Brighthouse Financial, Inc./MetLife
Citigroup Global Markets, Inc.
Crump Life Insurance Services, Inc.
CUNA Mutual Group/CMFG Life Insurance Company
EquiTrust Life Insurance Company
Fidelity & Guaranty Life Insurance Company
Forethought Life Insurance Company/Global Atlantic Financial Group
Genworth Life Insurance Company
Global Atlantic Financial Group/Forethought Life Insurance Company
Guardian Life Insurance Company
Guggenheim Partners/Security Benefit Life Insurance Company
ING USA Annuity and Life Insurance Company
Jackson National Life Insurance Company
John Hancock Life Insurance Company
Lincoln Benefit Life Company
Massachusetts Mutual Life Insurance Company
Merrill Lynch Life Agency Inc.
Metlife/Metropolitan Life Insurance Company/Brighthouse Financial, Inc.
Nationwide Life Insurance Company
New York Life Insurance Company
Northwestern Mutual Life Insurance Company
Pacific Life Insurance Company
Principal Financial Group
Prudential Life Insurance Company
Raymond James Insurance Group
RiverSource Life Insurance Company/Ameriprise Financial
Securities America, Inc./Ameriprise Financial
Security Benefit Life Insurance Company/Guggenheim Partners
Symetra Life Insurance Company
Transamerica Life Insurance Company
Unum Life Insurance Company of America
Voya/Reliastar Life Insurance Company
Wells Fargo Advisors
World Financial Group Insurance Agency, Inc.
[1] Evans Law Firm, Inc. was not involved in the case in any way.
