State Regulators Looking Closely at Variable Annuities
Often controversial, sales practices of variable annuities are getting a closer look by state regulators. The high commission products tend to give advisors the incentive to sell, while sometimes knowingly or unknowingly violating industry rules. Most violations stem from brokers’ advice to sell an annuity to buy a “better one”. Clients often don’t realize they will be charged a surrender fee if the sale is early. Variable annuities are the third most arbitrated product in the industry and states are now getting involved with harsher penalties against advisors selling the products incorrectly.