My wife had a Lincoln Legacy variable annuity transferred to a Nationwide Best of America variable annuity. The transfer was explained, including the seven year 7% commission. But there was no discussion about the previous policy—it had been one of ou best investments, appreciating from $30,000 to $74,000 in 8 years—18 months later we are studying both annuity policies and find it was at best a laderal move. The transfer should not even have been proposed. We feel the commission should be returned so we cac restore the former position.
My wife was in a very trusting mood at the time and asked for no details of any kind. Is there anyone who can advise us about a simplified form for arbitration. The 7% fee ($4900) is not even to pay a lawyer and we do not wish to loose at that point due lack of experience. Possibly your advice would be to forget it, we can acept that also. However we would still be left to wonder if this is common practice&does this happen to others. We would like to know what is proveable in arbitration. Is it cxhurning? Or is violating client trust?
The old variable annuity, Lincoln Legacy, was invested is assets allocation and growth and income (which compares to Balanced Fund of America and Income Fund of America. Possibly the previous fund was a Rolls Royce.
The comparison starts with dates of inception. The Lincoln Fund—1989, The Nationwide Best of America—the assets were diveded among 4 funds within the annuity, dates of inception 1997.
No effort was made to compare the previous policy to the new and no reasons were given why a new product would perform better than the old proven produce. When performance percentages are used (1,3, 5 and 10 year) the old policy wins in every area. Beta and risk factors level indicators favor the old policy by a wide margin (the risk levels are higher for the new policy). Rank within category figures the old policy. The Lincoln funds rank in the top quartile among all funds. There are twenty-eight fund choices in the new policy and when risk factors, length of service of managers, percentage performance factors and rank among all fund figures are considered we can find no better choices. We were expected to compare the funds on our own (a perspectus was mailed to us) We have learned the traditional ways of comparing mutual funds 18 months later—this is beyond the 20 day look period, but not beyond filing appeal thru arbitration).
My wife and I had attended an in-service put on by this firm. Everything in the in-service seemed to make sense. At the time we were dealing with 4 brokerage firms and when the salesman suggested that we transfer all assets to his firm so they could monitor the total retirement package better. Their monitoring decisions were not consistent with the spirit of trust and things said in the in-service.
In this spirit our guard was completely down. It was if an automobile mechanic recommended a new engine in the old car, we said certainly, we trust your judgement completely and okay the new engine without question. Later we find the new engine was transferred to the mechanics car. A trust was violated and we wonder why the recommendation was made at all.
We have written the state insurance commissioner, the complaint department at Nationwide, the compliance director at Financial Network and so far the compliance director is denying any liability.
Please do not contact the Financial Network Since it may interfere with arbitration appeal.
Very interestecd in anyone who has suggestions and thoughts.
Sincerely,
Jerry Anderson
Jerry
Roanoke, Indiana
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