Cuso Financial Services

Vernon Litigation Group Files Claim Against Cuso Financial Services

Investor’s rights attorneys from Vernon Litigation Group filed claims alleging Cuso Financial Services violated FINRA conduct rules by preying on a credit union client. The case also takes a look at CUSO Advisor Eric Shanks. If you feel that you may have been the victim of a CUSO Financial fraud please contact our attorneys today, we can help you determine if you have a case.

CUSO Financial Services Information

Although CUSO Financial Services, LP is licensed to recommend and sell stocks, corporate bonds, government bonds, mutual funds, municipal bonds, options, and other investments, almost half of CUSO’s annual revenue in 2014 was generated through the sales of annuities. Variable annuities sales accounted for over $35 million in revenue and $7 million was generated from prior sales of variable annuities. Sales of Equity Indexed Annuities generated additional revenue of almost $15 million. Comparing CUSO’s total revenues for 2014—less than $150 million—with the heavy annuity sales, there is a strong indication that those annuity sales represented more than 40% of CUSO’s total revenues.

CUSO Financial Services, LP (discussed above) is owned by CUSO Financial Services, Inc. (Cuso Financial), which is an insurance agency for life and disability insurance. The general partner of FINRA member CUSO is CUSO Financial. And, when you look at the overall revenues of the broker-dealer arm of CUSO, you see that it is, to a great degree, a sales arm of CUSO Financial Services, Inc., in that more than 50% of the broker-dealer’s revenues in 2014 came from the sale of insurance products.

Sales of Insurance Products

The significant sale of insurance products by CUSO especially troubling given that the bulk of CUSO’s business is individual investors other than high net-worth investors (according to CUSO’s ADV filing). In fact, records reflect that CUSO handles approximately $1.5 billion in assets spread over almost 10,000 accounts for an average account size of less than $200,000.

We have been writing for years regarding our concerns that expensive and illiquid annuities are way oversold to conservative investors in the United States because they are very profitable for the broker-dealer – rather than the best product for the investor.

We are also currently investigating whether CUSO allows these tax-deferred annuity products to be sold into tax-deferred retirement accounts such as IRAs, and if so, to what extent. Many investment professionals would agree that the sale of an expensive tax-deferred product into a tax-deferred account is almost always inappropriate. Here is why: IRAs and other retirement accounts already defer paying taxes on any gains, so investors do not need to pay for extra costs for a tax-deferred product such as an annuity when they already receive this benefit from the IRA or other retirement account. We have the necessary experience to help you with any CUSO Financial legal claims, and we will help you understand your current situation and what steps will help you get back on track.

Promises are appealing but may come with strings

The lure of a promise of guaranteed income (assuming the insurance company issuing the policy does not go out of business) is appealing, but at what cost. If you have a long time to invest and accumulate, the evidence does not favor annuities. Additionally, if your financial needs change and you decide you no longer want the annuity, the penalties in the first few years (and sometimes for many years) in the form of surrender or deferred sales charges can be significant.

You should never buy an annuity without first discussing it with your CPA and you should also get a second opinion from an independent financial professional before buying an annuity. As the financial records of CUSO indicate, these are very lucrative products for the brokerage firm to sell and, as a result, many brokerage firms and their advisors are highly motivated to sell these products for selfish reasons. If you feel like you have been a victim of financial fraud, contact us today, we can help you determine if you have a CUSO Financial lawsuit and help you determine what your next steps should be.

Closely Connected to a Number of Credit Unions

Our investigation of CUSO Financial Services, L.P. (CUSO) also indicates it closely aligns itself to credit unions. In fact, a number of credit unions appear to have a connection to CUSO, including the following credit unions:

3 Rivers Federal Credit UnionABNB Credit Union
Advantis Credit UnionAllegacy Federal Credit Union
Altura Credit UnionBaxter Credit Union
Bayfed Credit UnionBellco Credit Union
Citadel Federal Credit UnionClackamas Community Federal Credit Union
Coastal Federal Financial GroupCommunity America Credit Union
Consumers Credit UnionCredit Union of Southern California
Day Air Credit UnionEducators Credit Union
Elevations Credit UnionF&A Credit Union
Fairwinds Credit UnionFinancial Resources Federal Credit Union
Firefighters First Credit UnionFirst Community Credit Union
Hawaii USA Federal Credit UnionMarion & Polk Schools Credit Union
Mission Federal Credit UnionNASA Federal Credit Union
Nusenda Federal Credit UnionOne Nevada Credit Union
Oregon State Credit UnionPatelco Credit Union
Public Service Credit UnionRedwood Credit Union
Rogue Federal Credit UnionSan Antonio Federal Credit Union
San Mateo Credit UnionSelco Community Credit Union
Skyone Federal Credit UnionUniversity Federal Credit Union
University of Kentucky Federal Credit UnionVerity Credit Union
Warren Federal Credit UnionWescom Financial & Insurance Services
Workers Credit UnionWright-Patt Credit Union

If you belong to a credit union and believe that any insurance products or other products or services were improperly sold to you by CUSO or CUSO Financial, we encourage you to seek legal representation and get the proper advice as to your legal options.

Related Posts
  • Beware of Permanent Life Insurance Salespeople Read More
  • Cyber Insurance Is Becoming Necessary for Small Businesses Read More
  • Florida Residents Be Aware of ‘AOB’ | Vernon Litigation Group Read More