If you have suffered losses in a MetLife variable annuity or you believe MetLife misled you or sold you a variable annuity without warning you of the high costs or penalties associated with accessing your money, or convinced you to switch variable annuities, please call toll-free 1-866-817-0201.
FINRA, the Financial Industry Regulatory Authority, has indicated the agency will seek a “significant fine” from MetLife’s broker-dealer unit as part of a probe into possible violations tied to variable annuities. Of interest are potential violations “regarding alleged misrepresentations, suitability, and supervision in connection with sales and replacements of variable annuities and certain riders on such annuities.”
FINRA is the securities industry’s regulator guarding against abuses in the sale of retirement and savings products. FINRA informed Metlife on Sept. 25 that it would recommend disciplinary action.
This is unusual considering that a high level of variable annuity fraud and abuse has existed in the securities industry for more than a decade. Despite this, regulatory fines for such fraud and abuse has been rare. The large fine may be an indication of substantial wrongdoing.
Variable annuities are investment products that pay brokers a very high commission, are very expensive for investors and provide a service that is only appropriate for limited numbers of investors. Some people who likely should never be invested in variable annuities include those approaching or in retirement, those who need income from their investments immediately, investors who do not understand how a variable annuity works, anyone with an IRA, or anyone not needing life insurance.
Abuse can also occur when investors are asked to replace, or “switch,” existing variable annuities with new variable annuities. This can mean that the investor not only pays considerable exit penalties for the liquidation of the old annuity, but also incurs more illiquidity and new costs for the new annuity. Since most annuities offer similar benefits and are of similar quality, such switching is often to benefit the broker rather than the investor.