Sunday, September 21, 2014
Inquirer Daily News

Shady advice on annuity

DEAR HARRY: Recently, my financial adviser had me cash in an annuity with a value of $204,000. He then put the proceeds into a new fixed-index annuity with a large insurance policy attached. The withdrawal penalty was $8,000. He told me he would make me whole, but insisted I put in the $8,000 from my own resources. He later gave me two personal checks a few weeks apart, one for $3,000 and one for $3,500. When he gave me the second check, he said, "No more." That left me short $1,500. I guess he figured I'm too old to figure the simple math. I then wrote him a short letter telling him I expected the remaining $1,500. So far, no response. Can you make any suggestions?

WHAT HARRY SAYS: Most ofcoursely. Step one is to inform him that you will report him to the new insurance company and the Pennsylvania Insurance Department. What he has done is likely unlawful and subject to serious penalties. This should get his butt off his chair and into action. If it doesn't, follow through with reporting him. This sort of twisting will undoubtedly get him a commission that's far higher than the $8,000 he promised you. Older people in particular should be very careful of switching annuities. The deals are good for the salesman, not for you. The new annuities are almost never as good as the old.

 


Email Harry Gross at harrygrossDN@gmail.com, or write to him at Daily News, 801 Market St., Philadelphia, PA 19107. 

Harry Gross Daily News Personal Finance Columnist
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