Variable Annuity Replacements In Finra’s Crosshairs
February 6, 2023 by Tracey Longo
Variable annuity contract replacements are now obviously on the radar of the Financial Industry Regulatory Authority, as a mid-January report by Finra on its 2022 exam findings shows a significant number of product switches have not been in customers’ best interests.
While there can be good reasons for a rep to sell a customer a replacement variable annuity—including better investment options, higher payouts and lower expenses—Finra examiners found that a number of the replacements recommended by reps aren’t providing customers with a better deal, but rather serve solely to generate fresh commissions for the rep and broker-dealer and additional fees such as surrender charges for the insurer, all of which the customer pays.
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