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FINRA Investor Alert: Variable Annuities

Should You Exchange Your Variable Annuity?

The Financial Industry Regulatory Authority (FINRA) published an Investor Alert on how to determine if investors should exchange their variable annuity for another model. An annuity makes periodic payments to the holder of the annuity. There are fixed annuities that make fixed payments and variable annuities that make variable payments.

While equity-indexed annuities have become increasingly popular, some have questioned their value and suitability to retirees or soon-to-be-retirees. Equity-indexed annuities are complex and their complexity masks certain costs and risks. High sales commissions and low level of regulation also encourage sale practice abuses.

SLCG has written a paper on annuities and also on equity-indexed annuities. Investors can visit our dedicated website for more related papers and notes.