by John Darer CLU ChFC MSSC RSP
The Law Blog at Legal Match.com blows an opportunity to properly address the important subject of protecting seniors and others from being placed into annuity products that are not appropriate for their circumstances.
"Actual Annuities are legitimate securities that can be very profitable long-term investment option for the right person.", according to the author of a post on the Law Blog at Legalmatch,com (see Elder Annuity Fraud: The Scam That Won't Go Away" Andrew Dat August 5, 2010 Business Law section), Andrew Dat appears to be a staffer at legalmatch.com
Law Blog defines an "annuity scam" as one which "involves a financial advisor selling a long term insurance annuity to a client that doesn't need it".
One remedy that Law Blog/ Andrew Dat misstates as fact that "there are both federal and state laws that specifically prohibit this form of securities fraud".
After pairing the term annuity with derogatory and criminal acts twice, Andrew Dat of Law Blog on Legalmatch.com admits "however, this is not to say that annuities themselves are scams". Unfortunately his apologies will not carry weight of with Google, Bing or Yahoo search engines.
A few other comments:
- Unless we are talking about variable annuities, annuities ARE NOT securities.
- Annuities are issued by insurance companies which are regulated by each state they are admitted to do business.
- In order to sell annuities you must possess a valid insurance license in the state of solicitation and writing and an appointment with the life insurance company that is the issuer of the annuity contract
- A federal layer comes into play where the solicitation and distribution variable annuities are concerned, as those who sell such products must possess a FINRA Series 6 or 7 and 63 in addition to an insurance license and appointment.
Many states have laws governing how seniors can be approached when it comes to annuities. Licensed agents in some states are required to take a specific course on the subject.
Regardless of whether you are dealing with seniors, parents of a brain damaged child, or a disabled doctor, the financial professional should do an assessment of the person's needs before placing an individual into an annuity or any other financial instrument.
Those who appreciate the "subtleties" of the structured settlement watchdog's "unique" writing style might chuckle as he asks what do you expect from the author of an article about a serious topic that peppers his prose with:
"I apologize in advance for being a Derrick Downer (not "Debbie" as I'm a dude)"
"First of all slow down there Ke-mo-sah-bee"?
Part of my "Muttley Crew"
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