When is the Sale of Variable Annuities a Securities Regulation Violation?

As a national securities litigation law firm and investor protection advocate, the firm often speaks to investors who have experienced trouble with their investments in variable annuities and how they were sold. While variable annuities are a perfectly acceptable investment for the right investor, they are not for everyone and some sales practices associated with variable annuities are carefully monitored by securities regulators. There are several issues surrounding the sale of variable annuities that investors
should be keeping an eye out for.

1. Variable annuities may not be suitable for some types of investors (including retired or income needing investors). This is because variable annuities are expensive and have high surrender charges; this makes it difficult to make your money accessible in the event of unforeseen expenses, like medical bills.

2. Financial advisors sometimes purchase variable annuities with IRA funds, defeating one of the main purposes of a variable annuity – the potential tax benefit.

3. Brokers often sell one annuity and then purchase another, a practice that is called “annuity switching.” Such annuity switches are closely scrutinized by securities regulators.

4. Variable annuities often pay a high commission to the financial professional – often as much as 4-5%, which may, in some cases, explain the broker’s motivation in recommending the product.

If you have questions about a variable annuity you purchased, please feel free to call our Chicago office at 312-238-9650.

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 Boca Raton, Florida.

For more information on The White Law Group, please visit our website at https://whitesecuritieslaw.com.