FINRA Turns Its Attention to Indexed Annuities

Posted on May 22nd, 2014 at 9:03 AM

From the Desk of Jim Eccleston at Eccleston Law Offices:

FINRA has turned its attention towards indexed annuities.

An indexed annuity is a hybrid investment instrument blending features of fixed annuities with variable annuities. Typically, an indexed annuity guarantees a minimum interest rate, often between 1% and 3% if held to maturity, as well as a higher return tied to the stock market, though the return is capped.

The indexed annuity business has been booming, with sales last year climbing to $38.6 million, up to 13.2% from 2012. With concern that indexed annuities come with surrender charges and other costs, as well as some potential harm associated with exchanging a fixed annuity for an indexed annuity. FINRA has been scrutinizing the policies and procedures related to such exchanges.

Some brokers may view switching clients from one annuity to another as a way to boost their income. Such moves may cost clients more than they possibly could gain.

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston


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