Agent Arrested and Convicted for Selling an Annuity.

[hardworkwillwin]

Nobody misrepresented anything.

The sign on the front window of your office did.
As did your newspaper advertisements.
... and most certainly the sales presentation where you compared the benefits of an FIA versus a CD.


The product is the one the client wanted.

Irrelevant. If someone wants something that is bad for them, that doesn't absolve the seller of his/her moral, ethical, and legal responsibilities.


A similar plan to the one her boyfriend had. A FIA.

Irrelevant. Just because a product was right for her boyfriend does not make it right for her.



He earned 10% the year before on his, and she wanted a similar plan with a similar crediting strategy.

Again, irrelevant. Just because he earned 10% on his the year before doesn't mean she would earn 10% on hers at anytime. If she was told she would earn 10%, then the product was most certainly misrepresented again.



Your recommendation would of been nothing but a tradional fixed annuity.Eaning 3%, and that's not the type of plan Fran wanted. She was already earning that on her CD at the time.

My recommendation would have provided more accessibility to her money and stronger guarantees and left her MORE than just $100K liquid.



It was an average commission product for the type of FIA.


Bullsh*t. Do you think that we, as licensed agents, don't know the commissions on that product (and similar products)?

The writing agent commission is usually just a point or two less than the first-year surrender charge.

A more suitable product would have had a shorter surrender charge period, a lower surrender charge, and less than half the commission.



It passed suitability as she had 100K in liquidity.Home free and clear, and plenty of income.

You put over 70% of her cash into one single product that would have double-digit surrender penalty charges for a period of time longer than her life expectancy.

(and, if I'm not mistaken, the surrender penalty would even be applied upon death.)



I had over 20 years experience before recommending this product,

The number of years selling insurance does not rubber stamp "a recommendation". If anything it means you should be more responsibly than a brand new agent.



and at the time it was the #1 selling FIA in the country

Irrelevant. Just because a Toyota Camry is the best selling car in the country doesn't mean it meets every driver's needs.




with the best crediting strategy with alot of benefits.

AND extremely high surrender penalties and an extremely long surrender penalty period.



It's a product she probably would of never touched, unless she went into a nursing home.

Exactly. Which is where she is now. Since she did not own LTC insurance and she could not purchase it at the time, a product that combined an annuity with a long-term care rider would have been a much better recommendation for her. OR, at least an annuity with more accessibility to cash planning for an expected LTC event.



Ten agents would all make different recommendations.Why do you think yours would of been the correct one??
You are so judgemental.


After over two years on this forum and in court, you still haven't presented a defensible argument.

Your points are irrelevant or nonfactual; leaving you to resort to nothing but personal attacks.

I'm not judgmental. I am merely stating facts and telling you what I would do (or have done) in similar situations.

I know how tempting those 15% commissions look, especially with a "sale that is a slam dunk".

We all have to choose between what is in our best interest and what is in our client's best interest and find a place where the two intersect. It's rarely easy.


This life is short. We're all going to meet our Maker one day and we will have to give account for what we did on this earth. Losing a court case, spending time in jail, is nothing compared to eternity.






[/QUOT
It was an 8% commission.
And NO surrender penalty on death.
My BILLBOARD, and newspaper,window advertisment only said 13.575% GUARANTEED FIRST YEAR YIELD.Made no guaranteed claims in the second year.
The MD 10 was "THE PERFECT FUTURE INCOME PRODUCT,OR LEGACY PRODUCT". Backed by the 2nd biggest insurer in the US.At the time Allianz had 157% solevency. Do you even understand what this means?
Your a 33 year old. How much experience have you possibly had in this business???????
20% per year "FREE" withdrawl for nursing home....

 

[CHUMPS FROM OXFORD]

Holy heck Mr Ed...You sounded just like Juan in the Jody Arias trial. I want you on my side if I ever need it!

 

[CALTCAgent]

selling to elderly consumers unsuitable products

This was never determined unsuitable by the DOI. It passed company suitability.

Do you mean YOU feel its unsuitable?

Just because you or I don't feel its suitable does not mean a person that followed the rules should be punished as a criminal. Thats not appropriate IMO. Doesn't effectively weed out anything.

that have high commissions

I don't feel the commissions should come into play.

I believe Glenn said 8%, which I consider to be an average commission.

Aren't commissions approved for the product by the DOI?

I had a guy try to break into my house the other day, lucky for him he didn't make it inside as I stopped him at the window. Also lucky for him he was a faster runner than me, so he got away.

His intent was there to either steal or do harm.

Is he less guilty than a more successful burglar?

My point, he didn't make anything, so should he be less guilty than someone that stole something valuable?

Whether the commission is a lot or a little, if your intent was to do harm/steal, shouldn't you be guilty?

high surrender charges, long surrender periods

,

As a way to weed these out, wouldn't it be more effective to not approve these products in the first place?

The notion that they are approved for sale, but should not be sold is absurd.

They must have a place in the market or they wouldn't be approved.

Higher surrender, longer periods have benefits shorter ones don't have. (not saying I approve of them)

 

[Mr_Ed]

As a way to weed these out, wouldn't it be more effective to not approve these products in the first place?

The notion that they are approved for sale, but should not be sold is absurd.

They must have a place in the market or they wouldn't be approved.

I agree. They do have a place.

But the place for that kind of product is not to hold 70% of the liquid assets of an 80-something year old woman.

At that age, liquidity is EXTREMELY important, whether the client realizes it or not.

Instead of putting all $230K into an annuity with a surrender penalty period that exceeded her life expectancy, why not:

1) Put $100K into an Annuity/LTC combo product, which will at least double, maybe triple her deposit for LTC needs.

2) Put $50K into an annuity with a low surrender charge, and a short surrender penalty period, preferably with a nursing home waiver of the surrender charges,

3) Then put the remaining $80K into the FIA with the potential for bigger returns.

That would have served her needs much better.

And that probably would have avoided this mess.

 

[hardworkwillwin]

I agree. They do have a place.

But the place for that kind of product is not to hold 70% of the liquid assets of an 80-something year old woman.

At that age, liquidity is EXTREMELY important, whether the client realizes it or not.

Instead of putting all $230K into an annuity with a surrender penalty period that exceeded her life expectancy, why not:

1) Put $100K into an Annuity/LTC combo product, which will at least double, maybe triple her deposit for LTC needs.

2) Put $50K into an annuity with a low surrender charge, and a short surrender penalty period, preferably with a nursing home waiver of the surrender charges,

3) Then put the remaining $80K into the FIA with the potential for bigger returns.

That would have served her needs much better.

And that probably would have avoided this mess.

She only invested a total of $175,000.00.She was left with 100K in liquidity.She didn't want all this other stuff your talking about.She wanted the MD10.
The nursing home benefit was 20% of accumalation value per year for five years which would of been about 45K a year.

 

[CALTCAgent]

I agree. They do have a place.

But the place for that kind of product is not to hold 70% of the liquid assets of an 80-something year old woman.

At that age, liquidity is EXTREMELY important, whether the client realizes it or not.

Instead of putting all $230K into an annuity with a surrender penalty period that exceeded her life expectancy, why not:

1) Put $100K into an Annuity/LTC combo product, which will at least double, maybe triple her deposit for LTC needs.

2) Put $50K into an annuity with a low surrender charge, and a short surrender penalty period, preferably with a nursing home waiver of the surrender charges,

3) Then put the remaining $80K into the FIA with the potential for bigger returns.

That would have served her needs much better.

And that probably would have avoided this mess.

You have about 85% of her money in annuities. She had 275K total.

Once again , this should not be a criminal case, IMO.

 

[b61mack]

The horse already left the barn? No need to re-hash it. I have a splitting headache.

 

[Mr_Ed]

You have about 85% of her money in annuities. She had 275K total.

Once again , this should not be a criminal case, IMO.

I'd put only a small portion of it in an annuity with a surrender period exceeding her life expectancy and only a small portion of it in an annuity with extremely high surrender charges.

 

[djs]

The reason this sale was unsuitable is 2 things:
- Fran was medically diagnosed with dementia
- Glenn didn't involve the family in the decision.

Both of these you can argue are trivial points, such as just because Fran was medically diagnosed with dementia doesn't mean Glenn was aware of it. The facts somewhat indicate otherwise. Nothing hard, just details, such as the length of time of the relationship. Glenns relationship with Lou. The CYA letter that seemed out of place, etc. There is no way someone looking at the facts presented on this forum by Glenn and question whether or not he knew of the dementia, or at least should have strongly suspected it.

Not involving the son before the sale. If he had, the case would have never taken hold. CA has weird rules when it comes to this, but when you disinherit a family member, even if it had previously been done, you best make sure your butt is covered. Contacting the son would have solved this.

On top of this, the whole 'go down to the bank and get a cashiers check' routine didn't help.

Now, I've said it before and will say it again. It's easy for me to look back on this and see the yellow (maybe bright orange) flags in this case. Its another thing to see them as you are writing the deal. I don't want to confuse what is now Thursday morning quarterbacking with what I may have felt was the right thing for the client during the discussion of the sale. Anyone who hasn't at least once looked back at a sale a couple of days later and thought that they should have done something slightly different hasn't thought about the sales they made much.

Dan

 

[hardworkwillwin]

The reason this sale was unsuitable is 2 things:
- Fran was medically diagnosed with dementia
- Glenn didn't involve the family in the decision.

Both of these you can argue are trivial points, such as just because Fran was medically diagnosed with dementia doesn't mean Glenn was aware of it. The facts somewhat indicate otherwise. Nothing hard, just details, such as the length of time of the relationship. Glenns relationship with Lou. The CYA letter that seemed out of place, etc. There is no way someone looking at the facts presented on this forum by Glenn and question whether or not he knew of the dementia, or at least should have strongly suspected it.

Not involving the son before the sale. If he had, the case would have never taken hold. CA has weird rules when it comes to this, but when you disinherit a family member, even if it had previously been done, you best make sure your butt is covered. Contacting the son would have solved this.

On top of this, the whole 'go down to the bank and get a cashiers check' routine didn't help.

Now, I've said it before and will say it again. It's easy for me to look back on this and see the yellow (maybe bright orange) flags in this case. Its another thing to see them as you are writing the deal. I don't want to confuse what is now Thursday morning quarterbacking with what I may have felt was the right thing for the client during the discussion of the sale. Anyone who hasn't at least once looked back at a sale a couple of days later and thought that they should have done something slightly different hasn't thought about the sales they made much.

Dan

Dan i didn't know Fran had dementia. Fran wanted NOTHING TO DO WITH HER SON.I did contact him the day after the sale feeling Fran would be pissed if she knew.
My only concern was the beneficiary.
I also didn't go to the bank with the client.
Fran wanted this annuity, and if Lou knew something was wrong with Fran he should of told me, and he didn't. He lived with her for ten years.I only saw Fran about once a year.
The CYA letter was about her choice of beneficiaries.