Regulators Bear Down On VA Sales, Commissions
February 19, 2019 by Tracey Longo
The environment for high-commission variable annuities sales gets a little less friendly by the day.
Both the Securities and Exchange Commission and the Financial Industry Regulatory Authority are hyper-focusing their advisor examinations on variable annuities. That’s the word from securities attorneys at Eversheds Sutherland, who spoke during a press conference Thursday. The regulators are looking for product sales where pricing and commissions appear excessive and instances where advisors are doing costly swaps of clients’ existing contracts for new VAs that add little or no client benefit but generate new commissions and fees.
The law firm looked at preliminary enforcement statistics for 2018. According to Eversheds Sutherland partner Brian Rubin, the statistics show that Finra was zeroing in on advisors’ unsuitable sales, especially variable annuities, and levied $10 million in fines.
“One big enforcement Finra brought,” Rubin said, “involved a $4 million fine against a firm for suitability violations for variable annuities exchanges. The firm was also required to pay $2 million in customer restitution.
Click HERE to read the full story via Financial Advisor.
