Some financial advisors who sell variable annuities are concerned about recent developments.
These advisors fear that some companies might have bent their rules for big investors. They also worry about reports that some fund companies made cash payments to buy slots within VA contracts.
Terry Balding, a Sun Prairie, Wis., financial advisor, says the reports that some money managers might be cutting special deals tend to discredit the entire industry.
"Its very important that we know our clients are first in the eyes of these companies," says Balding says. "We have to be able to trust them."
So far, Balding is not getting many calls from clients about the VA investigations. But he would like to see the VA industry be more active in addressing possible problems with VA operations.
So far, "the VA industry has been very, very quiet," he says.
Balding recalls hearing one VA issuer bragging about the care it took with selecting fund subadvisors. Now, he complains, he looks at the VA contract and sees it is full of fund companies involved with the marketing timing probes.
Phil Denney, an advisor in Austin, Texas, agrees that the kinds of abuses regulators describe in their complaints are a big problem. "What [the accused traders] did was wrong, because they got special deals."
