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latarpley

Member
What is the name of your state? TN
I recently reviewed my elderly parents portfolio have at a major broker. I found that during the last month of the past three years they have been sold variable rate annuities totaling 135,000. Leaving only 30,000 in a mutual fund account. My mother's Retirement account is now totally in Variable Rate annuites, she is 79 years old. The last annuity sold to them was for my dad who was 85. They sold him all the riders, some of which he became too old to exercise because he turned 86 three days later. I have a NASD complaint filed and was contacted by a NASD supervisor 3 days later. Today I talked with the brokers Client Relations person (who is an attorney) and he wanted to know what UBS could do to make my parnets and me satisfied. Do I deal with them alone? get an attorney myself? or just hold out until the NASD investigation is complete? Personally, I want them them out of the VRA's retaining interest earned and the company compensating all surrenders fees. There are many issues I have found that would fill up way too much space here, but I need a little advice. VRA's are defiantely not investments my parents need. Their networth does not indicate any need for a fianancail insurance policy. I am concerned and (un-educated) about the tax consequences of liquidating, and figuring how to fairly resolve the issue.
 


longneck

Member
so it sounds like the broker dealer wants to make a deal? generally, if it's obvious that the broker committed some actual error or appears to have acted in an unethical manner, the BD will agree to a settlement that would make the client "whole". one way to figure out a dollar amount for the settlement would be to go back and "undo" the sales you disagree with. then figure out how much those investments would be worth now. make sure to include any fees, surrender charges, etc., in your calculation.

for example, let's say you mom was invested in 100k of mutual funds. 50k was sold and an annuity was purchased. now 10 years later, the remaining 50k of mutual funds is worth 100k. if you were to "undo" the annuity purchase, you mom should have had 200k of mutual funds.

so in this case, your settlement request would be for:
  • the annuity to be cashed out
  • the annuity surrender charges
  • the $100k she should have had in the mutual funds minutes the two values above
  • whatever charges are necessary to get you back in to those funds.

but don't get greedy here. the BD will want to know what you mom did with the payouts from the annuities. so make sure you know, because if she took them as cash, they will (and rightfully should) subtract that from their offer.
 
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