Broker-Dealers Refuse Ohio National Agreements

Cetera – NEXT Financial – Refuse Service Agreements with Ohio National

According to reports on Friday, several national broker-dealers, including Cetera Financial Group and NEXT Financial Group, are reportedly refusing to sign new agreements with Ohio National Financial Services Inc., during an ongoing dispute over variable annuity commissions.

Last fall, Ohio National made a surprising announcement that is was terminating the active selling agreements in place between Ohio National and brokerage firms, consequently eliminating the trailing commissions advisers would receive for selling certain variable annuity products.

According to reports, Ohio National has tried replacing these old contracts with a new servicing agreement, but firms like Cetera and NEXT Financial have reportedly refused to sign them.

The new contracts expressly excluded commission payments for the variable annuity products with a guaranteed minimum income benefit rider, according to a number of lawsuits filed against Ohio National. More than 10 broker-dealers have filed lawsuits against the firm to attempt to restore their annuity commissions.

LPL Financial has reportedly signed the new service agreement with the firm, since not signing could put other annuity commissions at risk. Ohio National reportedly won’t pay commissions on non-GMIB annuities until broker-dealers sign the new agreement.

Ohio National Lawsuits

According to Investment News, NEXT Financial, MSI and the six Cetera brokerages have all filed legal complaints against Ohio National to restore their annuity commissions.

Several other firms, including UBS Financial Services Inc., Commonwealth Financial Network and RBC Capital Markets, also have reportedly filed lawsuits.

In January, the firm reportedly sent notices to several brokers indicating that the insurer was terminating their state insurance appointments with the company.

Consequently, some advisers may be interacting with clients without an active, formal brokerage agreement or insurance relationship which could be a violation of securities or insurance rules.

This information is all publicly available and provided by The White Law Group.

If you are seeking the services of a securities attorney, The White Law Group may be able to help you. Please contact the offices at 1-888-637-5510 for a free consultation with a securities attorney.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee. The firm represents investors throughout the country in claims against their brokerage firm.

For more information on the firm and its representation of investors, visit www.WhiteSecuritiesLaw.com.