Of all the guarantees, bells and whistles associated with variable annuities, perhaps the biggest guarantee is the steep up-front commission the financial advisor can earn for selling the product.
According to a recent Reuters’ article, variable annuity sales in the U.S. totaled $142.8 billion last year, and brokers can earn 7 percent or more in commissions on the insurance products. Based on simple arithmetic, the commissions earned on an annual basis exceeds a billion dollars.
However, investors may be damaged when these complex products are not properly explained, tax or liquidity factors are not considered, or the advisor engages in “twisting” of improper annuity switching. “Twisting” happens when a broker encourages a client to trade in an older annuity to buy a different one, often at significant cost to the client and benefit to the broker.
The article highlights a Silver Law Group case involving an elderly investor who must wait until he is over 100 years old to have total access to his funds.
Silver Law Group is helping many investors try to recover their losses. If you have questions about your legal rights, or have been the victim of investment fraud, please contact Scott Silver of the Silver Law Group for a free consultation at ssilver@silverlaw.com or Toll Free at (855) 755-4799.