On November 8, 2012, stockbroker Donald Horras of Morgan Stanley Smith Barney transferred employment to Raymond James and Associates. Our law office is conducting an investigation and wants to know whether he was run out of Morgan Stanley or truly terminated his employment voluntarily? During the course of Mr. Horras career he was the subject of at least 7 customer complaints and one regulatory investigation. The customer complaints were generally made by elderly customers who claimed he made unsuitable recommendations of variable annuities that cause them significant losses to their retirement funds.
An annuity is a form of insurance that offers a series of payments for a period of time. Variable annuities are typically higher in risk when compared other types of annuities and depend on how the stock market is performing. Buyers have the option to allocate the cash invested into different types of assets such as mutual funds, indices, fixed income investments or bonds, and cash. Most variable annuities do not have principal protection, so investors can lose money if markets deteriorate.
The Law Offices of Robert Wayne Pearce P.A. is currently investigating Donald Horras' acts and omissions at Morgan Stanley Smith Barney and would be interested in speaking with anyone with the truth about Mr. Horras' sudden departure from that brokerage firm.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Showing posts with label Annuities. Show all posts
Showing posts with label Annuities. Show all posts
Wednesday, January 9, 2013
Tuesday, January 1, 2013
DON'T TRADE IN YOUR VARIABLE ANNUITY WITHOUT GETTING BACK ALL OF THE EXCESSIVE FEES!
More and more insurers are offering annuity contract buyouts to owners of Variable Annuity ("VA") contracts with a guaranteed-minimum-withdrawal benefit ("GMWB"). It seems that some insurers recognize an opportunity to retain all of the excessive fees they received from legacy VA clients and coax them out of VA contracts with GMWB features and death benefits within offer of a slightly higher account value. You remember the broker's pitch for the purchase of these VA contracts: "if the value goes down, you are guaranteed income for life"; and "every year the amount of the death benefit increases for your beneficiaries."
Why the change of heart? Well it's because many of the insurers recognize: we're in an extended period of low interest rates, and it's difficult for them to invest and make money; their VA contracts are underwater because the mutual fund sub-accounts performed poorly; and many VA contract owners can't or won't do the math! The insurers at Hartford Financial Services Group, Inc., AXA Equitable Life Ins. Co., Transamerica Life Insurance Co. and Wells Fargo want you to give up your GMWB benefit in exchange for a slightly higher account value with no more guarantees. The only beneficiaries of this exchange will be the brokers who retained all of the excessive upfront commissions and generous trailing commissions and the insurers who will duck out of VA contracts with product features that have now become unprofitable for them.
An annuity is a form of insurance that offers a series of payments for a period of time. VAs are typically higher in risk when compared to other types of annuities and depend on how the stock market is performing. Buyers have the option to allocate the cash invested into different types of assets such as mutual funds, indices, fixed income investments or bonds, and cash. Most VAs do not have principal protection, so investors can lose money if markets deteriorate. GMWB gives the VA policy owner the ability to protect their retirement investments against downside market risk by allowing the owner to withdraw a maximum percentage of their entire investment each year until the initial investment amount has been recouped.
Neither the broker nor the insurer looked out for your interest when they sold you this overpriced and unsuitable VA product and they certainly are not looking out for your interest today with the exchange offer. Make sure you consider the excessive fees you paid for the benefits they want to take back as well as the likelihood of future account losses that will no longer be protected in making your decision.
Have you suffered losses resulting from trading in your guaranteed-minimum-withdrawal benefit variable annuity? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Why the change of heart? Well it's because many of the insurers recognize: we're in an extended period of low interest rates, and it's difficult for them to invest and make money; their VA contracts are underwater because the mutual fund sub-accounts performed poorly; and many VA contract owners can't or won't do the math! The insurers at Hartford Financial Services Group, Inc., AXA Equitable Life Ins. Co., Transamerica Life Insurance Co. and Wells Fargo want you to give up your GMWB benefit in exchange for a slightly higher account value with no more guarantees. The only beneficiaries of this exchange will be the brokers who retained all of the excessive upfront commissions and generous trailing commissions and the insurers who will duck out of VA contracts with product features that have now become unprofitable for them.
An annuity is a form of insurance that offers a series of payments for a period of time. VAs are typically higher in risk when compared to other types of annuities and depend on how the stock market is performing. Buyers have the option to allocate the cash invested into different types of assets such as mutual funds, indices, fixed income investments or bonds, and cash. Most VAs do not have principal protection, so investors can lose money if markets deteriorate. GMWB gives the VA policy owner the ability to protect their retirement investments against downside market risk by allowing the owner to withdraw a maximum percentage of their entire investment each year until the initial investment amount has been recouped.
Neither the broker nor the insurer looked out for your interest when they sold you this overpriced and unsuitable VA product and they certainly are not looking out for your interest today with the exchange offer. Make sure you consider the excessive fees you paid for the benefits they want to take back as well as the likelihood of future account losses that will no longer be protected in making your decision.
Have you suffered losses resulting from trading in your guaranteed-minimum-withdrawal benefit variable annuity? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Monday, December 10, 2012
CALIFORNIA EQUITY-INDEXED ANNUITY SALESMAN FINDS HIMSELF IN JAIL
California insurance agent Glenn Neasham has been convicted of a felony and ordered to serve 90 days in jail for selling an equity-indexed annuity to an 83-year-old woman with dementia. Bank officials notified California's adult protection officials when the 83-year-old and a "male friend" were looking to withdraw $175,000 from her bank to buy an annuity. Bank officials also mentioned that the 83-year-old appeared confused and influenced by her male companion.
An annuity is a form of insurance that offers a series of payments for a period of time. An annuity can be either fixed or variable. Fixed annuities are invested in conservative investments, and the return to investors may vary, but a minimum rate of return is established. Variable annuities are higher in risk when compared to fixed annuities and depend on how the stock market is performing. Variable annuity buyers have the option to allocate the cash invested into different asset classes such as mutual funds, indices, fixed income investments or bonds, and money market.
Equity-indexed annuities are complex products that are hybrid of both fixed and variable annuities. Their returns vary more than a fixed annuity, but not as much as a variable annuity. So, equity-indexed annuities are more risky than fixed annuities, but less risky than a variable annuity. Equity-indexed annuities offer a minimum guaranteed interest rate combined with an interest rate linked to a market index. Because of the guaranteed interest rate, equity-indexed annuities have less market risk than variable annuities. Equity-indexed annuities also have the potential to earn returns better than traditional fixed annuities when the stock market is rising. Equity-indexed annuities come with fees that are higher than any investment, and sales commissions to brokers can go as high as 12%. Surrender charges can go as high as 18%.
At the trial, the district attorney presented evidence that the 83-year-old was not mentally competent to agree to the purchase, and Mr. Neasham knew this all along. The district attorney also presented evidence of the $14,000 or 8% sales commission and how it played into Mr. Neasham's criminal intent. The 83-year-old was too ill to appear at the criminal trial. In addition, Allianz agreed to waive any surrender charges and return the principal invested with interest.
Have you suffered a loss of principal in your equity-indexed annuity? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
An annuity is a form of insurance that offers a series of payments for a period of time. An annuity can be either fixed or variable. Fixed annuities are invested in conservative investments, and the return to investors may vary, but a minimum rate of return is established. Variable annuities are higher in risk when compared to fixed annuities and depend on how the stock market is performing. Variable annuity buyers have the option to allocate the cash invested into different asset classes such as mutual funds, indices, fixed income investments or bonds, and money market.
Equity-indexed annuities are complex products that are hybrid of both fixed and variable annuities. Their returns vary more than a fixed annuity, but not as much as a variable annuity. So, equity-indexed annuities are more risky than fixed annuities, but less risky than a variable annuity. Equity-indexed annuities offer a minimum guaranteed interest rate combined with an interest rate linked to a market index. Because of the guaranteed interest rate, equity-indexed annuities have less market risk than variable annuities. Equity-indexed annuities also have the potential to earn returns better than traditional fixed annuities when the stock market is rising. Equity-indexed annuities come with fees that are higher than any investment, and sales commissions to brokers can go as high as 12%. Surrender charges can go as high as 18%.
At the trial, the district attorney presented evidence that the 83-year-old was not mentally competent to agree to the purchase, and Mr. Neasham knew this all along. The district attorney also presented evidence of the $14,000 or 8% sales commission and how it played into Mr. Neasham's criminal intent. The 83-year-old was too ill to appear at the criminal trial. In addition, Allianz agreed to waive any surrender charges and return the principal invested with interest.
Have you suffered a loss of principal in your equity-indexed annuity? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Friday, December 7, 2012
INVESTORS NATIONWIDE SHOULD BEWARE OF EQUITY-INDEXED ANNUITIES
Equity-indexed annuities are one of the most abusively sold investments offered by brokers today. This is because their complexity, high fees and commissions, and long lockup periods are oftentimes misrepresented. Brokers are able to sell them to investors because they tout downside protection when markets deteriorate and generous upside potential when markets surge. Unfortunately, investors are never told the truth about equity-indexed annuities, which is also attributable to the brokers themselves not understanding how they work.
An annuity is a form of insurance that offers a series of payments for a period of time. An annuity can be either fixed or variable. Fixed annuities are invested in conservative investments, and the return to investors may vary, but a minimum rate of return is established. Variable annuities are higher in risk when compared to fixed annuities and depend on how the stock market is performing. Variable annuity buyers have the option to allocate the cash invested into different asset classes such as mutual funds, indices, fixed income investments or bonds, and money market.
Equity-indexed annuities are complex products that are hybrid of both fixed and variable annuities. Their returns vary more than a fixed annuity, but not as much as a variable annuity. So, equity-indexed annuities are more risky than fixed annuities, but less risky than a variable annuity. Equity-indexed annuities offer a minimum guaranteed interest rate combined with an interest rate linked to a market index. Because of the guaranteed interest rate, equity-indexed annuities have less market risk than variable annuities. Equity-indexed annuities also have the potential to earn returns better than traditional fixed annuities when the stock market is rising.
But equity-indexed annuities come with fees that are higher than any investment, the greatest sales commissions to brokers, and consequently the greatest surrender charges. Commissions to brokers can go as high as 12%, and surrender charges can be as high as 18%. Investors also take "haircuts" without fully understanding why the value of their account is decreasing. One example of a "haircut" is a performance cap, which limits upside potential, and it is often further reduced by a participation rate. Another example is the market value adjustment, which can significantly reduce an account's value if a client chooses to make withdrawals.
Some insurance companies have chosen not to sell equity-indexed variable annuities. Some of those companies included are New York Life, Prudential, TIAA-CRFF, and Met Life. Reason being is probably because very few people understand equity-indexed annuities, including the brokers who are selling them.
Have you suffered a loss of principal in your equity -indexed annuity? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
An annuity is a form of insurance that offers a series of payments for a period of time. An annuity can be either fixed or variable. Fixed annuities are invested in conservative investments, and the return to investors may vary, but a minimum rate of return is established. Variable annuities are higher in risk when compared to fixed annuities and depend on how the stock market is performing. Variable annuity buyers have the option to allocate the cash invested into different asset classes such as mutual funds, indices, fixed income investments or bonds, and money market.
Equity-indexed annuities are complex products that are hybrid of both fixed and variable annuities. Their returns vary more than a fixed annuity, but not as much as a variable annuity. So, equity-indexed annuities are more risky than fixed annuities, but less risky than a variable annuity. Equity-indexed annuities offer a minimum guaranteed interest rate combined with an interest rate linked to a market index. Because of the guaranteed interest rate, equity-indexed annuities have less market risk than variable annuities. Equity-indexed annuities also have the potential to earn returns better than traditional fixed annuities when the stock market is rising.
But equity-indexed annuities come with fees that are higher than any investment, the greatest sales commissions to brokers, and consequently the greatest surrender charges. Commissions to brokers can go as high as 12%, and surrender charges can be as high as 18%. Investors also take "haircuts" without fully understanding why the value of their account is decreasing. One example of a "haircut" is a performance cap, which limits upside potential, and it is often further reduced by a participation rate. Another example is the market value adjustment, which can significantly reduce an account's value if a client chooses to make withdrawals.
Some insurance companies have chosen not to sell equity-indexed variable annuities. Some of those companies included are New York Life, Prudential, TIAA-CRFF, and Met Life. Reason being is probably because very few people understand equity-indexed annuities, including the brokers who are selling them.
Have you suffered a loss of principal in your equity -indexed annuity? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Wednesday, December 5, 2012
VARIABLE ANNUITIES LISTED AMONG FINRA'S NATIONWIDE DISCIPLINARY ACTIONS
The Financial Industry Regulatory Authority (FINRA) recently reported that it will focus its attention on examining products that are held out to outperform the market. According to FINRA, the economic environment that many investors have faced since 2008 has fostered an increase in appetite for high yield investments given the low yield in Treasuries. It has also fostered fraud, misappropriation, illegal sales practices, and unsuitable recommendations by brokers. Some of the products FINRA will be focusing on are: variable annuities, non-traded real estate investment trusts, municipal offerings, leveraged exchange traded funds, mortgage-backed securities, private placements, structured products, and life settlements. FINRA will also look into fee schemes since it is concerned that broker-dealers are charging their clients hidden, mislabeled, or excessive fees. Several cases have already been filed by FINRA against firms who have been taking advantage of their clients through fees.
An annuity is a form of insurance that offers a series of payments for a period of time. Variable annuities are typically higher in risk when compared other types of annuities and depend on how the stock market is performing. Buyers have the option to allocate the cash invested into different types of assets such as mutual funds, indices, fixed income investments or bonds, and cash. Variable annuities do not guarantee principal protection, so investors can lose money if markets deteriorate.
With respect to variable annuity costs, an agent can collect at least 5% from the moment of sale and 0.5% or more every year for the life of the investment; variable annuities with common riders can take over 3% off annual returns. Surrender charges of as much as 9% may apply if an investor is in need of cash due to an unexpected emergency. Also, insurance companies are offering Guaranteed Lifetime Withdrawal Benefits (GLWB) without clearly telling investors the costs associated with taking early distributions. GLWBs allow percentage withdrawals based on the total amount without having to annuitize the investment. The problem with GLWBs is the immense cost of withdrawal, which is hidden away from investors in the terms of the agreement.
Have you suffered a loss of principal in your variable annuity? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
An annuity is a form of insurance that offers a series of payments for a period of time. Variable annuities are typically higher in risk when compared other types of annuities and depend on how the stock market is performing. Buyers have the option to allocate the cash invested into different types of assets such as mutual funds, indices, fixed income investments or bonds, and cash. Variable annuities do not guarantee principal protection, so investors can lose money if markets deteriorate.
With respect to variable annuity costs, an agent can collect at least 5% from the moment of sale and 0.5% or more every year for the life of the investment; variable annuities with common riders can take over 3% off annual returns. Surrender charges of as much as 9% may apply if an investor is in need of cash due to an unexpected emergency. Also, insurance companies are offering Guaranteed Lifetime Withdrawal Benefits (GLWB) without clearly telling investors the costs associated with taking early distributions. GLWBs allow percentage withdrawals based on the total amount without having to annuitize the investment. The problem with GLWBs is the immense cost of withdrawal, which is hidden away from investors in the terms of the agreement.
Have you suffered a loss of principal in your variable annuity? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Saturday, December 1, 2012
SENIORS ARE TARGETED IN VARIABLE ANNUITY SALES NATIONWIDE
As investors age, they become more vulnerable to making errors in their finances. This is because the ability to make sound financial decisions begins to peak in one's mid-50s. For this reason, retirees should be prepared to handle the risk of diminished capacity in order to prevent predatory or fraudulent sales tactics against them before it is too late. Some precautionary measures may include preparing a will and empowering an attorney to handle healthcare and financial issues. Still, brokers are able to convince senior investors into buying variable annuities by misrepresenting the true nature and cost of the product. Variable annuities are generally unsuitable for elderly investors, particularly those over 70 years for several reasons.
An annuity is a form of insurance that offers a series of payments for a period of time. Variable annuities are typically higher in risk when compared other types of annuities and depend on how the stock market is performing. Buyers have the option to allocate the cash invested into different types of assets such as mutual funds, indices, fixed income investments or bonds, and cash. Most variable annuities do not have principal protection, so investors can lose money if markets deteriorate.
Variable annuities are also very costly to investors. An agent can collect at least 5% from the moment of sale and 0.5% or more every year for the life of the investment; variable annuities with common riders can take over 3% off annual returns. Surrender charges of as much as 9% may apply if an investor is in need of cash due to an unexpected emergency. On top of all this, insurance companies are offering Guaranteed Lifetime Withdrawal Benefits (GLWB) without clearly telling investors the costs associated with taking early distributions. GLWBs allow percentage withdrawals based on the total amount without having to annuitize the investment. The problem with GLWBs is the immense cost of withdrawal, which is hidden away from investors in the terms of the agreement.
Senior investors cannot be urged enough to find a financial advisor or broker they can trust. Unfortunately, it can be difficult for the investor to tell if the broker is acting his or her best interest when suffering a decline in mental ability. That is why senior financial advisors or investors should also employ a trustworthy and financially savvy third-party or family member to monitor a broker's recommendations, which can help prevent significant investment losses well into retirement.
Have you suffered a loss of principal in your variable annuity? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
An annuity is a form of insurance that offers a series of payments for a period of time. Variable annuities are typically higher in risk when compared other types of annuities and depend on how the stock market is performing. Buyers have the option to allocate the cash invested into different types of assets such as mutual funds, indices, fixed income investments or bonds, and cash. Most variable annuities do not have principal protection, so investors can lose money if markets deteriorate.
Variable annuities are also very costly to investors. An agent can collect at least 5% from the moment of sale and 0.5% or more every year for the life of the investment; variable annuities with common riders can take over 3% off annual returns. Surrender charges of as much as 9% may apply if an investor is in need of cash due to an unexpected emergency. On top of all this, insurance companies are offering Guaranteed Lifetime Withdrawal Benefits (GLWB) without clearly telling investors the costs associated with taking early distributions. GLWBs allow percentage withdrawals based on the total amount without having to annuitize the investment. The problem with GLWBs is the immense cost of withdrawal, which is hidden away from investors in the terms of the agreement.
Senior investors cannot be urged enough to find a financial advisor or broker they can trust. Unfortunately, it can be difficult for the investor to tell if the broker is acting his or her best interest when suffering a decline in mental ability. That is why senior financial advisors or investors should also employ a trustworthy and financially savvy third-party or family member to monitor a broker's recommendations, which can help prevent significant investment losses well into retirement.
Have you suffered a loss of principal in your variable annuity? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Wednesday, November 28, 2012
INVESTOR ALERT - THE COST OF OWNING A VARIABLE ANNUITY IS HIGH FOR ALL INVESTORS NATIONWIDE
Without a doubt, variable annuities are costly to investors. An agent can collect at least 5% from the moment of sale and 0.5% or more every year for the life of the investment; variable annuities with common riders can take over 3% off annual returns. Surrender charges of as much as 9% may apply if an investor is in need of cash due to an unexpected emergency. On top of all this, insurance companies are offering Guaranteed Lifetime Withdrawal Benefits (GLWB) without clearly telling investors the costs associated with taking early distributions. GLWBs allow percentage withdrawals based on the total amount without having to annuitize the investment. The problem with GLWBs is the immense cost of withdrawal, which is hidden away from investors in the terms of the agreement.
So do the costs of owning a variable annuity confer a significant benefit to investors? The answer is most certainly not! Insurance companies have the numbers all figured out. They employ a slew of experts to compute prices and draft terms and conditions that make it advantageous to them to own the market risk they are purportedly taking away from investors.
An annuity is a form of insurance that offers a series of payments for a period of time. Variable annuities are typically higher in risk when compared other types of annuities and depend on how the stock market is performing. Buyers have the option to allocate the cash invested into different types of assets such as mutual funds, indices, fixed income investments or bonds, and cash. Variable annuities do not guarantee principal protection, so investors can lose money if markets deteriorate.
Investors cannot be urged enough to read the fine print when investing in a variable annuity. Even then, the complexity of the product may confuse an investor who is not experienced or financially savvy. This is why investors are often led into believing that variable annuities are safe and suitable and that the research should be left up to their broker. Unfortunately, those brokers oftentimes misrepresent and mislead investors into purchasing unsuitable variable annuities.
Have you suffered a loss of principal in your variable annuity? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
So do the costs of owning a variable annuity confer a significant benefit to investors? The answer is most certainly not! Insurance companies have the numbers all figured out. They employ a slew of experts to compute prices and draft terms and conditions that make it advantageous to them to own the market risk they are purportedly taking away from investors.
An annuity is a form of insurance that offers a series of payments for a period of time. Variable annuities are typically higher in risk when compared other types of annuities and depend on how the stock market is performing. Buyers have the option to allocate the cash invested into different types of assets such as mutual funds, indices, fixed income investments or bonds, and cash. Variable annuities do not guarantee principal protection, so investors can lose money if markets deteriorate.
Investors cannot be urged enough to read the fine print when investing in a variable annuity. Even then, the complexity of the product may confuse an investor who is not experienced or financially savvy. This is why investors are often led into believing that variable annuities are safe and suitable and that the research should be left up to their broker. Unfortunately, those brokers oftentimes misrepresent and mislead investors into purchasing unsuitable variable annuities.
Have you suffered a loss of principal in your variable annuity? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Friday, November 23, 2012
INVESTORS NATIONWIDE SHOULD BE CAREFUL INVESTING IN A DEFERRED VARIABLE ANNUITY
Since the stock market crash of 2008, investors have been more susceptible to recommendations by their brokers to buy annuities. This is because brokers represent annuities as a way of guaranteeing income for life, while protecting principal from a market decline. An annuity is a form of insurance that offers a series of payments for a period of time. An annuity can be either fixed or variable. Fixed annuities are invested in conservative investments, and the return to investors may vary, but a minimum rate of return is established. Variable annuities are higher in risk when compared to fixed annuities and depend on how the stock market is performing. Variable annuity buyers have the option to allocate the cash invested into different asset classes such as mutual funds, indices, fixed income investments or bonds, and cash.
Annuities can also be subcategorized as immediate or deferred. Immediate annuities offer a stream of cash payments from the moment of annuitization, or the annuity's inception. Deferred variable annuities allow an investor to place cash in different asset classes, which can grow tax deferred if market conditions are favorable. Investors in deferred variable annuities must agree to limit withdrawals to a certain percentage for a specified period of time or pay a penalty.
Investors should be concerned about the risks of owning deferred variable annuities. Apart from being extremely difficult to understand, deferred variable annuities require that the cash invested be locked up for a certain period of time. If investors want to access their cash, the will have to pay a hefty penalty. Also, terms and conditions favorable to insurance companies are hidden in the fine print. Investors are rarely informed of the high sales commissions, surrender costs, and other expenses associated with owning a deferred variable annuity. Furthermore, investors can lose their principal guarantee or guaranteed lifetime income if too much is withdrawn during the deferral period, or if the investor chooses not to annuitize. Last, the touted tax advantages of deferred variable annuities are washed when investors take distributions because they are taxed as ordinary income, not as capital gains.
Have you suffered a loss of principal in your deferred variable annuity? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Annuities can also be subcategorized as immediate or deferred. Immediate annuities offer a stream of cash payments from the moment of annuitization, or the annuity's inception. Deferred variable annuities allow an investor to place cash in different asset classes, which can grow tax deferred if market conditions are favorable. Investors in deferred variable annuities must agree to limit withdrawals to a certain percentage for a specified period of time or pay a penalty.
Investors should be concerned about the risks of owning deferred variable annuities. Apart from being extremely difficult to understand, deferred variable annuities require that the cash invested be locked up for a certain period of time. If investors want to access their cash, the will have to pay a hefty penalty. Also, terms and conditions favorable to insurance companies are hidden in the fine print. Investors are rarely informed of the high sales commissions, surrender costs, and other expenses associated with owning a deferred variable annuity. Furthermore, investors can lose their principal guarantee or guaranteed lifetime income if too much is withdrawn during the deferral period, or if the investor chooses not to annuitize. Last, the touted tax advantages of deferred variable annuities are washed when investors take distributions because they are taxed as ordinary income, not as capital gains.
Have you suffered a loss of principal in your deferred variable annuity? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Tuesday, November 20, 2012
BUYERS OF ANNUITIES IN FLORIDA SHOULD VERIFY THEIR AGENT'S INSURANCE LICENSE
Investors interested in purchasing an annuity in Florida should always verify their agent's state insurance and Financial Industry Regulatory Authority licenses prior to making the investment. Investors should also research the type of annuity they are purchasing so that they can fully understand the risks associated with, and terms of, the annuity. The Florida Department of Insurance is the regulatory body that oversees the sale of annuities in Florida. Prior to purchasing the annuity, investors can do a simple investigation by verifying the insurance company and its agent with the Department.
An annuity is a form of insurance that offers a series of payments for a period of time. Three options are usually provided to investors:
-Fixed Annuities: funds are invested in conservative investments. The return to investors may vary, but a minimum rate of return must be established. Buyers cannot establish their own asset allocation.
-Variable Annuities: are typically higher in risk and depend on how the stock market is performing. Buyers have the option to allocate the cash invested into different types of assets such as mutual funds, indices, fixed income investments or bonds, and cash. Variable annuities do not guarantee principal protection, so investors can lose money if markets deteriorate.
-Equity-Indexed Annuities: are hybrids of fixed and variable annuities. They are more risky that fixed annuities and less risky than variable annuities. Returns are based on market returns, but they also offer a minimum rate of return.
Annuities are not suitable for all investors. Insurance agents should make sure that they understand their client's goals prior to selling an annuity. Investors should also do their own investigation to make sure that they annuity they are interested in fits their needs and risk tolerance.
If an unlicensed insurance agent sold you a fixed, variable, or equity-indexed annuity, you may be able to rescind your contract and recover your lost principal. Call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
An annuity is a form of insurance that offers a series of payments for a period of time. Three options are usually provided to investors:
-Fixed Annuities: funds are invested in conservative investments. The return to investors may vary, but a minimum rate of return must be established. Buyers cannot establish their own asset allocation.
-Variable Annuities: are typically higher in risk and depend on how the stock market is performing. Buyers have the option to allocate the cash invested into different types of assets such as mutual funds, indices, fixed income investments or bonds, and cash. Variable annuities do not guarantee principal protection, so investors can lose money if markets deteriorate.
-Equity-Indexed Annuities: are hybrids of fixed and variable annuities. They are more risky that fixed annuities and less risky than variable annuities. Returns are based on market returns, but they also offer a minimum rate of return.
Annuities are not suitable for all investors. Insurance agents should make sure that they understand their client's goals prior to selling an annuity. Investors should also do their own investigation to make sure that they annuity they are interested in fits their needs and risk tolerance.
If an unlicensed insurance agent sold you a fixed, variable, or equity-indexed annuity, you may be able to rescind your contract and recover your lost principal. Call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Sunday, November 4, 2012
SELLING EQUITY INDEXED ANNUITIES TO 80 YEAR OLDS? GO TO JAIL!
The Wall Street Journal reported that a California insurance agent, who sold an equity indexed annuity to an 83-year old woman with dementia, has been convicted of felony theft and ordered to serve 90 days in jail. Glenn Neasham, who once enjoyed an annual income of $500,000 from selling such products, now seeks donations to pay his legal fees. According to Robert Pearce, a securities attorney, "Anyone who sells equity indexed annuities to 80-year olds should go directly to jail!"
An equity indexed annuity is a complex, illiquid financial product that most experts agree is unsuitable for an 83 year old. Should the policy holder need to access her invested principal in the first few years of the policy, to meet medical expenses for instance, she would be hit with surrender charges - 12.5% of the principal amount during the first year, according to Allianz, the issuer of the policy.
In this case, bank officials notified California's adult-protection officials when the octogenarian, accompanied by a male friend, sought to withdraw $175,000 from her bank account to purchase the annuity. Bank officials said the woman seemed confused and influenced by the male companion.
The octogenarian was too ill to appear at the criminal trial of Mr. Neasham. The district attorney presented evidence that she was not mentally competent to consent to the transaction and that Mr. Neasham knew this at the time of sale. The district attorney also presented evidence that a $14,000 (or 8 percent) commission "played into his criminal intent."
A conservator has since been appointed and Allianz agreed to waive the surrender charge and return the octogenarian's principal with interest.
Sales of equity indexed annuities grew to $32.2 billion in 2011. Agents quoted in the article all agreed, however, that the criminal conviction will have a chilling effect and change their sales practices. One said that the case will be "in the back of my mind" when considering selling these products to elderly people, and "more than ever, I'd be willing to walk away from a sale." ("Annuity Case Chills Agents," Wall Street Journal).
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
An equity indexed annuity is a complex, illiquid financial product that most experts agree is unsuitable for an 83 year old. Should the policy holder need to access her invested principal in the first few years of the policy, to meet medical expenses for instance, she would be hit with surrender charges - 12.5% of the principal amount during the first year, according to Allianz, the issuer of the policy.
In this case, bank officials notified California's adult-protection officials when the octogenarian, accompanied by a male friend, sought to withdraw $175,000 from her bank account to purchase the annuity. Bank officials said the woman seemed confused and influenced by the male companion.
The octogenarian was too ill to appear at the criminal trial of Mr. Neasham. The district attorney presented evidence that she was not mentally competent to consent to the transaction and that Mr. Neasham knew this at the time of sale. The district attorney also presented evidence that a $14,000 (or 8 percent) commission "played into his criminal intent."
A conservator has since been appointed and Allianz agreed to waive the surrender charge and return the octogenarian's principal with interest.
Sales of equity indexed annuities grew to $32.2 billion in 2011. Agents quoted in the article all agreed, however, that the criminal conviction will have a chilling effect and change their sales practices. One said that the case will be "in the back of my mind" when considering selling these products to elderly people, and "more than ever, I'd be willing to walk away from a sale." ("Annuity Case Chills Agents," Wall Street Journal).
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
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