Not even your annuity salesman!
I know it comes as a shock (well, maybe not so much if you’ve read my book) — I mean, he’s so nice! and you went to college with his sister! — but now comes a report quarterbacked by Senator Elizabeth Warren . . . “Villas, Castles, and Vacations: How Perks and Giveaways Create Conflicts of Interest in the Annuity Industry” . . . that
. . . it is perfectly legal for some advisers to steer customers into complex financial products that will earn the highest rewards, perks and prizes for the advisers – even if they are bad options for their customers. Research suggests that this loophole costs Americans an estimated $17 billion every year. That’s $17 billion taken out of the pockets of retirees by unscrupulous advisers who are more interested in collecting fees and prizes for themselves than helping families build real security.
Thirteen of the 15 major annuity providers investigated acknowledged providing these incentives.
Which would be okay if the sales person were straigtforward.
“I recommend you go with this one. It may not offer the best value; but in addition to my commission — which on annuities is big, and why I’m reocmmending them in the first place — if you buy this particular annuity I also stand a really good chance of getting an all-expenses Carribbean vacation. So what do you say?”
But this is not how annuities are generally pitched.
Don’t forget to watch the Republican debate tonight.
Quote of the Day
Many [managing agents of New York cooperative apartment buildings] promote arbitration and mediation. This would prevent cases like the recent one in which $130,000 in legal fees were exhausted to decide who should pay for window bars costing $924.~The New York Times, October, 1995
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