While the number of arbitration cases involving variable annuities declined in 2013, it did so at a slower rate than mutual funds and common stock, according to a Wall Street Journal report citing FINRA data. In 2012, VA cases were the only class for which claims increased, topping 200 claims.
Complaints against VAs, which are often billed as “tax free, high income, can’t lose” investments, include high fees, surrender charges, lack of access to money and high commissions. Their complexity often makes arbitrators sympathetic to claimants. Though the IRI says that 90% of investors are somewhat satisfied, VAs will be a focus for FINRA going forward, says CEO Richard Ketchum, as Americans age and look for retirement income strategies.
