What is a Variable Annuity?

A variable annuity is a contract between you and an insurance company. It serves as an investment account that may grow on a tax-deferred basis and includes certain insurance features, such as the ability to turn your account into a stream of periodic payments. You purchase a variable annuity contract by making either a single purchase payment or a series of purchase payments.

Risks Related to Variable Annuities

Variable annuities involve investment risks, just like mutual funds. If the investment choices the investor selects for the variable annuity performs poorly, the investor can lose money including potential loss of the original investment. Investors pay significant charges when they invest in a variable annuity.

Often, investors do not understand all the charges before investing. These charges reduce the value of your account and the return on your investment. Most variable annuities typically have high fees and charges that may include deductions from purchase payments, surrender fees, and significant ongoing fees and expenses associated with owning a contract.

The Securities and Exchange Commission’s (SEC) has issued some warnings to investor’s about variable annuities, such as:

• Variable annuities are not suitable for meeting short-term goals.
  
  
• Variable annuities involve investment risks just like mutual funds do. If the investment choices you selected for the variable annuity perform poorly, you could lose money.
  
  
• Contract fees may go towards your financial professional’s compensation. That means they may receive higher compensation for selling some contracts or investment products than for others.
  

Despite these many warnings, brokers frequently push variable annuity products to enrich themselves at the investor’s expense. Financial advisors have a professional duty and legal obligation to advise their clients on whether or not variable annuity investments are the right choice for them. To the extent that a broker (financial advisor) failed to apprise the investor of the associated risks, the customer may be entitled to a recovery of his or her investment losses.



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To the extent that your broker failed to abide by any of their duties, you may be entitled to recoup your investment losses.

Investors who suffered losses from investments in variable annuities may have valid claims to recover those losses from the brokerage firms that sold the investments. If you are an investor who has suffered investment losses in variable annuities, it is imperative that you take action. Riera Law’s securities attorney has represented thousands of victims, and we will aggressively pursue claims to recover your losses.

Concerns about possible broker misconduct are serious, and we are committed to fighting on your behalf. Contact Us today for a FREE Consultation. 305-204-9779.