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VALIC Financial Advisors to Pay $1.75 Million for Variable Annuity Swaps

Posted on Monday, March 15th, 2021 at 10:26 pm    

In January 2021, FINRA fined VALIC Financial Advisors $1.75 million regarding variable annuity exchanges. According to FINRA’s Letter of Acceptance Waiver, and Consent (AWC), from October 2011 through December 2014, VALIC Financial Advisors failed to establish, maintain and enforce a system reasonably designed to supervise the sale of variable annuity contracts.

Variable annuity swaps can cause investors to incur substantial hidden costs and fees. Unfortunately for investors, variable annuity swaps are often solely traded to generate commissions and fees for the broker. 

Variable annuities are complex products that permit customers to choose among a variety of contract features and options. Variable annuities are known to carry high fees and pay substantial commissions to the brokers who recommend them. Additionally, variable annuities carry high up-front costs and/or surrender charges for investors

According to FINRA, “Rule 2330(d)(1) requires a member firm to “implement surveillance procedures to determine if any of the member’s associated persons have rates of effecting deferred variable annuity exchanges that raise for review whether such rates of exchanges evidence conduct inconsistent with the applicable provisions of this Rule, other applicable FINRA rules, or the federal securities laws (‘inappropriate exchanges’).”

In 2019, VALIC Financial Advisors went through a rebrand and is now known as “AIG Retirement Services.

Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, VALIC Financial Advisors may be liable for investment or other losses suffered by its customers.

Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.