Helping Investors Protect Their Rights

Holding Brokers Liable For Poor Practices Involving Annuities

Regulators have been warning brokers to be careful about annuities for years. Unfortunately, no matter how many warnings and instructions regulators issue, the very poor practices of certain brokers are still rampant. The basic reasoning is this: annuities tend to pay very large commissions to broker-dealers. The more annuities brokers sell, the more money they make.

At The Law Offices of Jeffrey A. Feldman, our lawyers refuse to let brokers benefit at the cost of individual investors. We put our years of experience and proven successes to use for clients who believe they have become victims of investment fraud. Whether we are facing securities arbitration or securities litigation, we are always fully prepared to fight to protect our clients’ interests.

Since 1994, our firm has been representing clients in matters involving broker misconduct and investment advisor misconduct. Located in San Francisco, we represent clients in California and throughout the United States.

Helping You Understand The Different Types Of Annuities Available

In general, an annuity is a very high-cost investment vehicle. However, the benefits and consequences of holding an annuity depends greatly on the type of annuity involved such as:

Variable annuity: A variable annuity is basically investing under the terms of an insurance contract. You place your money into investments which are wrapped around by an insurance contract. The main benefits of this may be that income tax on your investments is delayed or that your heirs receive your entire original investment back, even if the investments lose money. The really bad news is that when you do pay taxes, it is at ordinary income rates, as opposed to the typically lesser capital gains rates, your money is tied up for many years (and if you do take it out, you will have to pay very high surrender charges), and in order to take advantage of the guaranty that you won’t lose principal, you have to die, all of which is not mentioned, or is played down, when your broker recommends these products. You are also likely being asked to concentrate much of your investment assets with one counter-party, and if anything happens to that counter party, the insurance company which issued the annuity, you may only be able to recover part of what you invested, if anything.

Fixed annuity: A fixed annuity does provide you with a fixed return for a set amount of time, but your money is still tied up for years, you may not be able to obtain higher interest rates even if interest rates go up in the market, and you will likely have to pay significant surrender charges if you do take out your principal early. The actual company you invest in is highly important, as with variable annuities.

Immediate annuity: An immediate annuity can actually be a very good part of a retirement plan, as you receive a certain amount of income each year for the rest of your life once you pay into one of these. It is important, however, that you are not talked into putting all of your money into an immediate annuity, as you don’t want to subject too much of your wealth to the credit of one counter-party, and you don’t want to risk that inflation will erode the purchasing power of your entire income stream.

Common Problems Involved With Annuities

We are prepared to advocate on your behalf if you have run into any securities law concern relating to annuities, including:

  • Unexplained or misrepresented terms related to the annuity
  • Unexplained or misrepresented surrender charges for the withdrawal of funds
  • Being sold improper or unsuitable investments in variable annuities
  • Overconcentration of funds into any single annuity

Contact Attorney Jeffrey A. Feldman Today

If you have fallen victim to the financial wrongdoing of a broker-dealer or financial advisor, contact us online . Located in Northern California, we represent clients who have investments anywhere in the United States.

Handling Securities-Related Disputes, Arbitration, and Litigation
in California and Nationwide-Call 415-413-8955

Free Initial Consultations-Contingent Fee Arrangements.

The Law Offices of Jeffrey A. Feldman.