I’m just mad! Indexed annuities don’t need this kind of press!

March 28, 2023 by Sheryl J. Moore

Not to beat a dead horse here, but I am still reading about the news of that guy who got slammed by the SEC for his indexed annuity sales.

First comment: Yesterday he was an “adviser” and today he is an “advisor.” Let’s talk about the differences.

Second comment: “…[the advisor would] use the proceeds to purchase a new fixed index annuity, thereby triggering another fee of 7% to 8% and, in some instances, causing clients to incur a surrender charge, the SEC alleges.”

WRONG. BS. The “fee of 7% to 8% IS the surrender charge.

Third comment: The lawyer for this guy says, “Every one of the products mentioned in the SEC complaint has performed well, and no one has lost any money.”

Does that mean it wasn’t wrong?

I have long despised the churning practice of using bonus annuities to offset the surrender charges on an existing annuity that is being replaced. Many agents will use a bonus as justification to replace an existing contract, with a new annuity, which has “shiny bright objects,” and coincidentally allows the agent to collect another commission on the same money. To legitimize the practice, the defense is usually “the product wasn’t performing.” To that I say- you should have done your due diligence before selling the FIRST annuity.

P.S. I’m just mad! Indexed annuities don’t need this kind of press! -sjm