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Warning: What You Need to Know About ‘Indexed’ Annuities?

A new warning was just released targeting the sales incentives for ‘Indexed’ Annuities. Exotic trips and other perks are being offered to agents for selling them. Sen. Elizabeth Warren (D., Mass.) has been looking into this form of investment and is focusing on the indexed annuity, widely known within the industry for the perks available to agents, according to industry executives and financial advisers. This type of annuity is a controversial investment that promises returns tied to the stock-market index, guarantees against losses if the market falls, and is much more complicated with serious limitations on the upside potential.

Sen. Warren issued letters to 15 of the nation’s largest annuity issuers back in April, with concern over marketing materials aimed at agents for high-volume annuity sales receiving trips to California’s Wine Country, South Africa, or even a private yacht tour on the Mediterranean. Cash Rewards, car leases, and jewelry were also mentioned as perks listed in the letters.

Sen. Warren’s says, “That annuity sellers who are “more interested in earning perks than in acting in their clients’ best interest can place Americans’ savings and retirement security at risk.”

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