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Feb 16, 2017 by |

Marin County Annuity Fraud Attorney: Buffer Annuities

ATTORNEY NEWSLETTER

The New and Shiny Annuity Scam: Buffer Annuities

Buffer Annuities

Just when you thought that annuities could not possibly become more complicated, we are introduced to buffer annuities. Buffer annuities are a hybrid of variable and indexed annuities. The carrier invests your premium in derivative securities (“structured products”) such as options, warrants, futures, and swaps. Carriers describe the target market as those with a moderate appetite for risk: the group of buyers who fall in between those with an aggressive risk appetite who flock to variable annuities and those with a low appetite for risk who settle for index annuities, even in a post-crisis, low-interest environment. Due to their complexity, buffer annuities are gaining scrutiny from regulators of all kind, including the Financial Industry Regulatory Authority, Inc. (FINRA) and the California Department of Business Oversight.

Even more so than other types of annuities, buffer annuities are unbelievably complicated and difficult to understand. It is reported that even those individuals who have mastered variable annuities struggle to manipulate and comprehend these buffer annuities. While the basis for the complaints seen by regulators cannot yet be divulged, regulators did not hold back when discussing just how dangerous buffer annuities are.

Things To Consider

Annuities are always complicated, and buffer annuities are even more so. Derivatives and other structured products are complex investments and typically found only in the portfolios of very sophisticated investors. Please beware if you’re considering a buffer annuity. We are relieved regulators are taking a close look at this product.

Some of the major annuity and life insurance providers in California are:

The Financial Industry Regulatory Authority is the largest independent regulator for all securities firms doing business in the United States, and aims to protect investors by making sure the United States securities industry operates fairly and honestly. FINRA operates the largest arbitration forum in the United States.

Contact Us

Evans Law Firm, Inc. handles annuity fraud and insurance fraud cases and lawsuits in Marin, California and in all other counties in California as well. If you have purchased an annuity policy, or are considering purchasing one, and would like to know whether it is a suitable investment for you, contact Evans Law Firm, Inc. at 415-441-8669 or via email at info@evanslaw.com.

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