DISQUS

craig · 2 years ago

I was a licensed insurance agent at one time and my brother has both his insurance license and series 6,7,etc. Unfortunately the email doesn't give any reason to suspect impropriety on the part of the broker. There are many different types of variable annuities and some I would argue are very appropriate for an elderly person. The second example given is clearly a case where the broker screwed the 18 year old out of being able to use the money when she was planning. The key factor here is 'best interests' and what the plan for the money was/could be. Another point, usually around 10-15% can be withdrawn from the contract every year free of surrender charges.

Patrick · 2 years ago

If the daughter of the elderly man wants to file a complaint, the NASD is probably the best place to start.

Even so, the responsibility of proving the brokerage acted in their best interest and not the customer's will lie on the father and daughter.

I would recommend to Maryanne that she consult with her father before he makes any more investments.

Marlene · 2 years ago

Most larger banks require tellers, personal bankers to make referrals. In some cases if you don't meet the minimum in referrals and sales you either don't get a raise or you are terminated. Also personal bankers usually get points for different account they sell and are expected to meet the minimum and get $$$ for what points they go over. A lot of personal bankers are also licensed to sell fix annuities and even variable. I'm very suspicious, when I'm at a personal banker's desk. Since I know they are under sales pressure, I'm very cautious in taking their advice.

As to where the father/daughter can complain too, besides NASD, complain to your States Insurance Department.

Wendy · 2 years ago

Maryanne might also bring this to the attention of her state's Attorney General. If she is lucky enough to live in New York, Governor Elliot Spitzer or Attorney General Andrew Cuomo surely would be interested in this matter. They are both very pro-active about consumer and financial fraud.

Good luck and my heart goes out to both her and her father in this troubling matter.

robyn · 2 years ago

i have to agree with the first post on this. i am also a licensed insurance agent and there are many very appropriate variable annuties out there, for elderly as well. obviously you have to be careful about what you purchase but i think this post is extremely misleading and biased. how do we know that maryanne's father wasn't sold something appropriate and she is uneducated? i also don't like it when brokers and insurance agents are made out to be money hungry thieves who would screw over their own mother to make a buck. ive never sold a product to a customer that wasn't in their best interst and never would. you just have to be careful in who you do business with.

Flexo · 2 years ago

With all due respect to insurance agents, what are the terms of a variable annuity that could be considered "good" for most elderly? They'll put money in with an ever-decreasing chance of seeing profit. The money is then tied up with penalties for withdrawals at a time when they should be living off distributions from their retirement funds.

From MsFinancialSavvy:

"Because calculating the cost can be complex and much of the cost is hidden, most elderly investors have no idea of the charges they are actually facing when they purchase an annuity. In order to understand all of the rules and charges they or someone they know, would have to read the annuity contract for, at least a few hours. Much of the heavy costs are charged if the annuity is cancelled and the money taken, before the surrender period, which typically is seven years."

There's a *possibility* that a variable annuity can be structured in a way that makes sense for an elderly individual, but it just isn't likely.

But I would invite any insurance agents stopping by to share the details of what *they* would have offered Maryanne's 86 year old father, and why that would be better than other investment options. And let's be honest -- be sure to include all "hidden fees." I'm willing to be convinced.

MossySF · 2 years ago

2.35% is high even for the typical VA. Sounds like her father was upsold on a bunch of extra options. Start with 1.5% as the base policy expense -- add in .6% for the no-loss guarantee, add in .25% for the inflation-bump rider.

Basically, insurance salespeople prey on people's fears. The thought of losing money in the market is 1000 times more powerful than thoughts of gaining money.

Novena Grills · 2 years ago

My elderly friend (84 years of age, with terminal illness) walks into BOA to do banking. Was approached by employee, who also was his friend of 13 years, was talked into buying a $75,000.00 annunity, paying him $900.00 return for life. His life expect was 2 years at most. He purchased it, believing BOA was looking out for his interest. He passed with only receiving 13 payments of $900.00. By the way, he was 80% blind and could not read documents. No witnessess present. BOA is trying to keep remaining funds. Looking for assistance to fight for him. I am POA and PR of the estate.

Katie B. · 2 years ago

I worked for a major U.S. bank with a major financial services arm and was saddened by what I saw regarding annuity sales and the elderly. The commission earned on these products is near obscene, making them a product that is often pushed and as a result often pushed on people that shouldn't purchase the product in the first place. Annuities are an extremely confusing product to the general public.

I don't know how people who cheat the elderly sleep at night. Let this be a lesson for the children of aging parents, have the hard conversations with your parents. Explain to them that there are many high pressure sales people (and that's what they are folks- sales people,most are not CFAs or CFPs) who work at the bank and are interested in profiting off of an older individual who is potentially less savvy than a younger consumer who has access to the internet. Tell your parents you would be glad to go down to the bank and have a meeting between your parents and the sales person.

Shame on those who try to make a quick commission off of the elderly.

Timothy · 2 years ago

First of all the withdrawal charges are a non-issue for his distributions. Most annuities allow a person to take 10-15% out per year and he shouldn't be taking more out anyway. Also there is a "free look" period where he could have surrendered the annuity. Additional "bells and whistles" almost certainly did not increase the broker's commission. Finally RMD's can deplete an account prematurely if a retiree lives longer than expected, and an annuity may protect against that.

Novena Grills · 2 years ago

I will use everything I have, with the help of God above, to put a end to this.

N. Travis · 2 years ago

My mom is considering a 400,000 10 year anuity with Met. Life at 6.75 % in which each month she will receive principal and interest payment (roughly $4,000 a each month) during the course of 10 years. Is this a good idea?

Notsofast · 1 year ago

The point where annuities get scary is that they are only as good as the company that issues them. Boomers are likely to overwhelm those companies, making a few go bankrupt and then those annuities will be worthless.

Greg · 2 months ago

My 84 year old mother with alzheimer's was sold a 15 year 75,000 annuity. She didn't know what she was signing. I only found out after my father's death when going through all their files. I think this is not only unethical, it's elder abuse. Help.