Mass. insurance salesman charged with acting as an unregistered investment adviser
- Thread starter Northeast Agent
- Start date
- 11,457
Here's a more complete article on this:
https://www.investmentnews.com/article/20191218/FREE/191219934/massachusetts-charges-insurance-salesman-with-posing-as-investment
Some key points - all in the same paragraph:
1) "Mr. Skinner repeatedly recommends that prospective clients liquidate securities from their retirement investment accounts to purchase fixed indexed annuities," the complaint states.
The problem there is the word 'recommend'. We have to steer very clear of making securities recommendations without proper licensing and registrations. This thread is very helpful on that subject: https://insurance-forums.com/community/threads/new-annuity-suitability.95909/#post-1333276
2) "In many instances, Mr. Skinner recommends that prospective clients surrender existing annuities incurring significant penalties. In some cases, Mr. Skinner also recommends that client or prospective client's entire life savings consist of annuities sold through him."
This one is inexcusable to me. That's just churning existing annuities for new commissions.
His title of "retirement specialist"... was immaterial, but used in the article as additional cannon fodder.
Selling the same annuity to everyone... isn't really an issue (as long as it is suitable for each person).
https://www.investmentnews.com/article/20191218/FREE/191219934/massachusetts-charges-insurance-salesman-with-posing-as-investment
Some key points - all in the same paragraph:
1) "Mr. Skinner repeatedly recommends that prospective clients liquidate securities from their retirement investment accounts to purchase fixed indexed annuities," the complaint states.
The problem there is the word 'recommend'. We have to steer very clear of making securities recommendations without proper licensing and registrations. This thread is very helpful on that subject: https://insurance-forums.com/community/threads/new-annuity-suitability.95909/#post-1333276
2) "In many instances, Mr. Skinner recommends that prospective clients surrender existing annuities incurring significant penalties. In some cases, Mr. Skinner also recommends that client or prospective client's entire life savings consist of annuities sold through him."
This one is inexcusable to me. That's just churning existing annuities for new commissions.
His title of "retirement specialist"... was immaterial, but used in the article as additional cannon fodder.
Selling the same annuity to everyone... isn't really an issue (as long as it is suitable for each person).
How is this even possible? As someone else said, is the carrier complicit with this? Is he just straight lying on the suitability form?
- 11,457
I wouldn't know.
I just know that with articles like these, it's the devil in the details, not in the headline.
I just know that with articles like these, it's the devil in the details, not in the headline.
- 5,904
"So here is what you're doing now, and here is an alternative using the annuity I explained to you. Which would you prefer?"
vs.
"You have all this money in these mutual funds. These are very risky. I recommend you sell those mutual funds and put your money in this annuity I just showed you."
I would venture to say there are clearly some liberties being taken here, with regard to spotty disclosure of assets and liquidity. Flat out lies? Who knows. I would also venture to say that clients are often doing back-end surrenders and then applying for these annuities as a "cash with app" to avoid the much more stringent suitability standards in place for replacements.
I had originally posted this morning then deleted it as it seemed that my comments had little to do with the *actual* charges of him having been charged with acting as an unregistered investment adviser, and more to do with questionable practices all around. I can't help but wonder - now that this individual has been charged, will the state or insurance division take a closer look at this individual, his business practices, and the entities and organizations that have helped him conduct business (perhaps even helping him promote himself in such a way?), perhaps profiting a pretty penny themselves along the way?
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- 11,457
If it's like the Dick Van Dyke case, it'll be the state department of securities doing the investigation.
Update: Illinois Department of Securities Action | NAFA
The difference here, is this time the department of securities is NOT overstepping their bounds based on these accusations.
Update: Illinois Department of Securities Action | NAFA
The difference here, is this time the department of securities is NOT overstepping their bounds based on these accusations.
- 4,886
Let me guess, the Annuity that produced an average comm of 31k in those 128 cases was one with a lower comm & shorter surr charge schedule.
