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.

FORMER MERRILL LYNCH REGISTERED REPRESENTATIVE ADAM SPENCER DEANE SUSPENDED AND FINED FOR UNLICENSED AND FRAUDULENT SALE OF VARIABLE ANNUITY

Former Merrill Lynch registered representative Adam Spencer Deane has been fined $25,000.00 and suspended from association with any FINRA member in any capacity for three months. Mr. Deane consented to FINRA's findings that he recommended and executed a variable annuity replacement contract for a client in a state in which Deane was not licensed to sell insurance products and include false information in the firm's electronic books and records. Mr. Deane had prepared the variable annuity application in Florida and sent it to the client's residence in New York for her signature, which the client signed and sent back to Mr. Deane. Merrill Lynch determined that the annuity contract could not be honored because the variable annuity was not available to New York residents. These findings by FINRA ultimately led to the described sanctions against Mr. Deane.
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 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. A deferred variable annuity offers investors a way to accumulate savings and defer taxes until money is withdrawn. Variable annuities do not guarantee principal protection, so investors can lose money if markets deteriorate.
Broker-dealers must establish and implement a reasonable supervisory system to protect customers from unlicensed and fraudulent sales practices. If broker-dealers do not establish and/or implement a reasonable supervisory system, they may be liable to investors for damages. In the case of Mr. Deane and Merrill Lynch, Mr. Deane logged into Merrill Lynch's web-based system used by sales employees to complete transaction paperwork for annuity contract purchases showing that the client was resident of New York. After the system rejected the replacement transaction because the annuity could not be offered to New York residents and because Mr. Deane was not licensed in New York, Mr. Deane inputted Florida as the client's state of residence. Mr. Deane also used the system to falsely show that the client signed the annuity contract in Florida. Clearly, Merrill Lynch failed to properly supervise Mr. Deane during his plot to sell an annuity to a client in New York. Therefore, an investor who has suffered damages can bring forth claims to recover losses against Merrill Lynch for acts such as Mr. Deane's unlicensed and fraudulent sale.
Have you suffered losses in a variable annuity sold by a Merrill Lynch or any other brokerage firm? 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.

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.

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.

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.

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.

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.