Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:Regulators Examine Variable Products Not Rated 0.0 Email Routing List Email & Route  Print Print
Wednesday, June 9, 2004

Regulators Examine Variable Products

Reported by Theresa Sim

Citing investor complaints and increased regulatory actions, the SEC and the NASD issued a report reviewing sales practices in the variable products industry on Wednesday. Disclosure, supervision, training and records maintenance are areas examined in the report.

The report cited higher fees and surrender charges as driving inappropriate sales of variable annuities and insurance products, with variable annuities charging an average of 2.3 percent of assets, compared to 1.44 percent for the average mutual fund.

The agencies said that many individual investors had complained that they were sold products they didn't understand or didn't think were appropriate.

Specifically, the agencies identified "weak" practices that registered representatives engaged in, including: failing to take client-specific information into account, such as age, investment objectives, investment sophistication, and other investments; excessive or simply unsuitable investment switching; and firm-wide compliance, supervisory and training problems.

The report also identified sales practices that it said were "sound."

The agencies have, for the past few years, acted against non-compliant broker dealers, most recently against Nationwide and American Express Financial Advisors brokers in May. A summary of the NASD and the SEC's actions is listed on the NASD's website.

"It is critical that broker-dealers ensure that the securities they sell are appropriate for the individual investor. Given the complexity of variable annuities, extra care is required," said SEC Chairman William H. Donaldson.

The NASD announced it was proposing new rules relating to sales disclosure, supervision and training in late April.

"[G]iven the examination findings, the large number of enforcement cases over the past couple of years and the complexity of these products, we feel we can best protect investors by establishing stronger, more specific rules that apply specifically to variable annuities," said Robert R. Glauber, NASD chairman and chief executive officer. 

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2024: Q2Q1
2023: Q4Q3Q2Q1
2022: Q4Q3Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly




©All rights reserved to InvestmentWires, Inc. 1997-2024
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use