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Investor Alert – Annuity Exchange Abuse

FINRA and its predecessor, The National Association of Securities Dealers, has undertaken various enforcement actions to alert the brokerage industry and the investing public that generally, the exchange or replacement of Insurance or Annuity contracts is NOT a good idea. The reasons include the following:

New charges may be imposed with the new contract, or it may increase the time for which surrender charge applies.

  1. The charges may be higher under the new contract.
  2. The costly features in the new contracts may not be needed.
  3. The sales representative will be getting paid a higher commission on a variable annuity sale than on other investments.

Industry Rules require that before an advisor or ‘salesman’ recommends the purchase, sale, or exchange of any variable annuity, the advisor or broker must have reasonable grounds to believe that the recommendations is suitable for this customer in light of his needs and investment objective. Switching from one variable annuity to another that does not improve the customer’s position but simply generates another commission for the broker, is prohibited.

The broker or advisor must be certain he has made an adequate effort to obtain complete customer information concerning the customer’s need for liquidity and retirement income. A similar effort must be made when recommending a variable life insurance policy.

For more information about how to recover your assets from investment fraud by a financial advisor or brokerage firm, contact Attorney Howard Rosenfield at (860) 677-4334 or email howardrosenfield@stockbrokerproblems.com. Attorney Rosenfield is also available to speak on specific subject matter topics related to investment fraud.

Client Reviews
Howard Rosenfield is truly a life saver. After months of working with my financial advisor, I found out he was making risky investments without my knowledge. When I discovered how much money I lost, I thought there was nothing I could do. Howard explained all the difficult terms and what exactly my financial advisor did wrong. If it wasn't for Howard, I would never have recovered my losses and would be under extreme financial distress to this day. J.
Howard’s experience and advice throughout this ordeal was invaluable and reassuring. The law in general is complicated, difficult to understand and very personal. Financial misappropriation is even more personal but Howard’s years of experience and calm demeanor helped keep me calm, focused and moving forward. For anyone in need of a knowledgeable and experienced Investment Recovery Attorney I strongly recommend Howard. Laura
I was filled with anxiety and stress when I selected Attorney Howard Rosenfield to represent me. Instantaneously, I felt comfortable and at ease. Attorney Rosenfield listens attentively to the facts and asks questions and competently reiterates and verifies the accuracy and completeness of my statements. Perseverance, trustworthy and superb legal and communication skills mark Attorney Rosenfield to be one of the best in his field of law. Helen