Dishonest annuity agents love to target retirees and people close to retirement. That’s because retirees have a lifetime’s worth of savings to invest. So, the bigger the investment, the bigger the commission for the agent. There are a lot more characteristics that annuity scam artists look for. Some are inexperienced investors, people with large 401(k)s and people who are mentally ill. Do you or your loved one fall into one of these categories?
Could An Annuity Scam Artist Target You?
Here is a short list of vulnerable “targets” who may find themselves in the crosshairs of a scammy annuity sales agent:
Recently retired or about to be retired investors:Retirees tend to have more assets to invest. A dishonest annuity agent wants you to invest as much money as possible. This is because every dollar you invest will increase his or her commissions.
Someone with a 401(k), IRA account or lump sum pension distribution: Annuity agents know that recently-retired people may have large 401(k), IRA or lump sum pension payouts that they need roll over into a tax-protected product. Sometimes an annuity works well for investors in this situation. Other times, it will rob them of their retirement nest egg.
Inexperienced investors: Annuity agents love investors who have never had an investment account before – especially investors who have only saved and invested in their company retirement program. These investors don’t tend to understand what annuities are or how they work. Also, they’re the easiest to manipulate into buying an unsuitable and overpriced annuity.
Physically ill and mentally ill investors: Fraudulent agents have been known to target investors who are mentally or physically ill. They will convince the investor to buy an illiquid annuity that locks up their money for decades. Sometimes, dishonest agents will make themselves or their companies the beneficiaries rather than the annuitant’s family members. This is to essentially rob the person of his or her money.
Investors who recently received an inheritance or recently-widowed spouses: Fraudulent annuity agents like to target people who have recently come into money — especially inexperienced, novice or naïve investors. If you’ve recently acquired money that you need to manage, be certain that you’re dealing with someone you can trust. Only work with a FINRA-registered agent and check his or her background on FINRA’s BrokerCheck website. Be suspect of everyone – even supposedly trustworthy people recommended by your friends and family.
Worried about your annuity?
Once you get locked into an annuity, it’s difficult to get out of it without incurring thousands of dollars of costs and fees. If an annuity traps you and you want to get out of it, or if your annuity has caused you unexpected financial losses, the Michael Brady Lynch Firm is available to look deeper into your situation. We will educate you about your legal rights and options. Plus, we offer recommendations about what you can do to resolve your annuity problems completely free of charge.