Radnor, Pennsylvania based Hartford Investment Financial Services, LLC and Berwyn, Pennsylvania based Hartford Life Distributors, LLC now known as Forethought Distributors, LLC submitted a Letter of Acceptance, Waiver and Consent in which the firms were censured, fined $100,000 jointly and severally, and consented to the entry of Financial Industry Regulatory Authority (FINRA) findings that Hartford Life prepared and distributed numerous copies of a brochure called Staying Ahead of the Curve that discussed features of the Hartford Floating Rate Fund (HFRF) mutual fund, which were unwarranted and misleading in light of changing conditions in the bank loan market. The brochure was provided to selling broker-dealers for use in the marketing and sale of HFRF to their customers. The brochure was approved by Hartford Investment, the Chief Investment Advisor to HFRF.
In particular, the brochure contained misleading statements regarding HFRF's appropriateness for bond investors concerned about the price stability of their investments, the potential for greater price stability compared with other fixed income investments, and suitability for investors seeking some degree of capital preservation. Given the conditions in the bank loan market during the relevant period, these statements were not accurate. The findings also stated that between the time when Hartford Investment became aware of conditions that rendered the statements inaccurate and removed the statements on a later date, it approved the brochure at least twice. Consequently, during this period, Hartford Life distributed approximately 2,450 copies of the brochure. FINRA further included that although concerns regarding the bank loan market and HFRF were reported to the mutual fund's board, none of Hartford Investment's employees responsible for approving HFRF's advertising materials participated in the meetings where these concerns were discussed.
FINRA also found that both firms' written supervisory procedures also lacked any mechanism for ensuring that those responsible for drafting or reviewing advertising materials would be informed of material facts concerning relevant conditions in the bank loan market or HFRF's performance. As a consequence, Hartford Investment approved, and Hartford Life continued to distribute, thousands of copies of the brochure that contained unwarranted and misleading statements.
Have you suffered losses in a mutual fund or any other investment sold by Hartford Investment Financial Services, Hartford Life Distributors, and/or Forethought Distributors? 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.
Showing posts with label Hartford Investment. Show all posts
Showing posts with label Hartford Investment. Show all posts
Thursday, July 25, 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.
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