Every month, Partner Chris Vernon is asked to write for Naples Florida Weekly. Below is today’s publication! Follow Vernon Litigation Group to stay abreast of the ever-changing world of annuities and investment fraud!
Red Flag number two: The insurance company will pay your trusted annuity agent a big commission if he or she convinces you to buy the annuity. While a lot of annuity salesperson’s brag about the fact that the investor doesn’t have to pay them anything, I view this as a negative for the investor. Specifically, if you are entering into a contract, it is not a good idea to have the person advising you to be paid by the party on the other side of the contract.
These two red flags create significant conflicts of interest in both the “advisor” recommending the annuity and the insurance company issuing the annuity. As a result, I recommend independent due diligence and a second or even third opinion before investing in an annuity.
This independent due diligence is important due to the fact that most annuities have significant financial penalties if you change your mind and want to liquidate it within the first few years. This liquidation penalty can put investors in the difficult position of losing significant principal to liquidate the annuity or being stuck in an annuity they no longer want.
Remember, whatever it is, let’s make sure our money is working for us and not for somebody else. ¦
— Chris Vernon is a Naples attorney who represents investors in financial disputes throughout the United States. He is also licensed as a Registered Investment Advisor. Courts have accepted Mr. Vernon as an expert on investment-related issues as both a lawyer and an investment professional.