In the News: Equity Indexed Annuities
(May 2010)
Forbes published an article on equity-indexed annuities (EIAs). It describes the history of and market for EIAs, compares EIAs with other fixed and variable annuities, and briefly weighs the advantages and disadvantages of EIAs.
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. EIAs are similar to both fixed and variable annuities in that they pay an interest rate linked...
Reverse Convertibles tied to TiVo Stock
(May 2010)
J. P. Morgan's 64% Note Tied to TiVo Stock Shows Risks of Reverse Convertibles
Bloomberg issued a news release reporting on the reverse convertible, a structured product, on TiVo.
A reverse convertible note is a type of structured product that is linked to an equity security or an index. It is a short-term note that pays a relatively high coupon rate compared to traditional notes. The returns of the note at maturity depends on whether the equity, called 'reference asset', falls below a...
FINRA Fines H&R Block Financial Advisors
(Feb 2010)
FINRA Fines H&R Block Financial Advisors $200,000 for Inadequate Supervision of Reverse Convertible Notes Sales, Suspends and Fines Broker for Unsuitable Sales to Retired Couple
The Financial Industry Regulatory Authority (FINRA) issued a press release today announcing that it had
[fined] H&R Block Financial Advisors, Inc., (n/k/a Ameriprise Advisor Services, Inc.) $200,000 for failing to establish adequate supervisory systems and procedures for supervising sales of [reverse convertible...
FINRA Investor Alert: Variable Annuities [Update]
(Sep 2009)
Variable Annuities: Beyond the Hard Sell
The Financial Industry Regulatory Authority (FINRA) published an Investor Alert to help investors decide on how to invest for retirement. 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.
Annuities can carry costs and risks that many investors may not be aware of because brokers who are incentivized by commission-generation do...
FINRA Investor Alert: Life Settlements
(Jul 2009)
Seniors Beware: What You Should Know About Life Settlements
The Financial Industry Regulatory Authority (FINRA) published an Investor Alert on life settlement. Life settlement is the transaction that involves selling one's life insurance policy to a third party that did not issue the policy for a lump sum payment whose value is higher than the policy's cash surrender value but less than the net death benefit.
Because life settlement is targeted at senior people, the industry can be...
SLCG Research: Equity Indexed Annuities
(Sep 2008)
SLCG released today 'An Economic Analysis of Equity-Indexed Annuities'.
On June 25, 2008, the Securities and Exchange Commission (SEC) issued a rule proposal to exclude equity-indexed annuities from exemption from Federal securities laws. By requiring registration of equity-indexed annuities under Federal securities laws, the rule gives investors of equity-indexed annuities the same protection as it gives to investors of other securities similar to equity-indexed annuities.
In this...
FINRA Investor Alert: Variable Annuities
(Mar 2006)
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...
