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Written by 6:38 pm Current Investigations

Investor Alert: What are Buffer Annuities?

Andrew Todd Yocum

What are Buffer Annuities?

The White Law Group is investigating the liability that FINRA registered brokerage firms would have for improperly selling buffer annuities to their clients.

There is a new type of variable annuity called a buffer annuity that is beginning to gain popularity among financial advisors. It is highly complex and uses structured products in the sub account as the underlying investment, not mutual funds. In most cases, these annuities place a premium on principal protection and steady account value growth rather than rapid accumulation.

Generally, they allow clients to receive returns that are linked to a stock market index over a limited period of time. Those returns are subject to a limit that is determined periodically by the life insurer.

At the same time, insurers use options to duplicate the performance of the index and to buffer a percentage of downside risk, which varies across the board on products offered by the insurers.

Investment News reported three years ago that buffer annuities had just started to gain interest among financial advisers. Now FINRA has started to see complaints about these buffer annuities. According to FINRA, these are highly complex products.

Highly Complex Investment Products

Since buffer annuities typically offer an income component, these investments often appeal to retirees living on a fixed income.  Brokerage firms often push these type of products because of the high commissions associated with their sale and creation and substantial embedded fees.

The White Law Group is specifically investigating the following buffered annuities products:

AXA Structured Capital Strategies ADV

MetLife Shield Level Selector

Allianz Index Advantage® Variable Annuity

Based on what is currently known, it appears that investors in these products may have claims to recover their investment losses.

Free Consultation

To speak with a securities attorney regarding your losses in a buffered annuity product, please call The White Law Group at 888-637-5510 for a free consultation.  The White Law Group is a national securities fraud, securities arbitration and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.

For more information on The White Law Group, visit the firm’s website at https://whitesecuritieslaw.com.


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