The Financial Industry Regulatory Authority (FINRA) is scrutinizing the sales of variable annuities, noting that they are complex products typically marketed to seniors. This follows a record fine of $25 million FINRA slammed MetLife Securities, Inc. (MetLife) with for negligent misrepresentations and omissions of fact regarding the costs and guarantees relating to variable annuities and variable annuity replacements.
At a recent Insured Retirement Institute (IRI) conference, FINRA associate vice president and enforcement chief counsel James Day stated that variable annuities “… are at the sweet spot of complex products marketed to retirees and people about to retire.” Also noted at the IRI conference as a specific area of FINRA’s scrutiny were L-share variable annuities. These products offer increased liquidity and a shorter surrender-penalty period, typically three years rather than seven.
Variable annuity investments are popular among senior investors who are close to retirement. While they can be an appropriate investment under the right circumstances, investors should be aware of their restrictive features and tax consequences. Investors should also be concerned with sales pitches. Before purchasing a variable annuity or replacing an existing variable annuity, investors should carefully investigate the product as well as the salesman. This includes reading the prospectus, which contains important information about the annuity contract terms, fees and charges, investment options, and death benefits. In addition, investors should compare the benefit and costs of the annuity to other variable annuities as well as other types of investments such as mutual funds.
In order to protect customers, FINRA rules require broker-dealers to establish and implement a reasonable supervisory system. These rules require supervisors to monitor firm activities to ensure they comply with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures. If broker-dealers do not establish and implement such protective measures, they may be liable to account holders for damages stemming from a lack of supervision and/or misrepresentations or omissions of fact. As a result, investors whose brokers have misrepresented their investments can bring forth claims to recover damages against broker-dealers, like MetLife, which have a duty to oversee its registered representatives in order to protect their customers’ interests.
Has your broker misrepresented your variable annuity? Have you suffered losses due to misrepresentations and/or omissions relating to your annuity investments? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against MetLife or any other brokerage firm’s stockbrokers for unsuitable recommendations, misrepresentations and/or omissions, and other stockbroker misconduct.
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 40 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 post a comment, call (800) 732-2889, send Mr. Pearce an email at pearce@rwpearce.com, and/or visit our website at www.secatty.com for answers to any of your questions about this blog post and/or any related matter.
Robert Wayne Pearce
Robert Wayne Pearce of The Law Offices of Robert Wayne Pearce, P.A. has been a trial attorney for more than 40 years and has helped recover over $125 million dollars for his clients. During that time, he developed a well-respected and highly accomplished legal career representing investors and brokers in disputes with one another and the government and industry regulators. To speak with Attorney Pearce, call (800) 732-2889 or Contact Us online for a FREE INITIAL CONSULTATION with Attorney Pearce about your case.
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