Salas Wang LLC is currently investigating sales of certain variable annuities. Â Recently, the Illinois Secretary of State’s securities department issued a notice of hearing to Thrivent Investment Management Inc. Â In its notice of hearing, the department alleges:
Some time before 2012, Thrivent Financial, issuer of Variable Annuities, rolled out a new feature to its Variable Annuity. This feature consisted of adding a Guaranteed Lifetime Withdrawal Benefit (GLWB) to the Variable Annuity m return for a rider fee.
The 2012 issued Variable Annuity was recommended and sold by Thrivent Investment’s registered Salespersons and Investment Adviser Representatives.
Thrivent Financial issued and offered for sale only one type of Deferred Variable Annuity Other than the addition of the GLWB rider, no other significant changes were made to the features or terms of the Variable Annuity.
During the time period of January 2011 to June of 2012 and July 2013 through June 2014, Thrivent Investment transacted, in Illinois, approximately 282 replacement/exchange transactions of legacy Thrivent Financial Variable Annuities for new Thrivent Financial Variable Annuities.
All of these transactions involved Thrivent Investment brokerage accounts and, in most cases, the investors filled out a new account opening and suitability document as part of the Variable Annuity replacement transaction.
These transactions followed a similar pattern. They all involved the replacement of a legacy Thrivent Financial Variable Annuity (or a Variable Annuity issued by a Thrivent Financial Notice of Hearing affiliate) with a new Thrivent Financial Variable Annuity. The legacy Variable Annuity had been held by the investor for a period past its surrender period. (This meant that liquidation of the Variable Annuity was not subject to a surrender penalty.) In addition, the new Variable Annuity’s surrender period was waived. Lastly, most of the replacements involved persons 50 years of age or older.
In approximately 57 transactions, the investor was solicited and recommended to purchase a GLWB rider.
The GLWB rider is marketed and sold by Thrivent Investment and its Salespersons and Investment Adviser Representatives as a means for investors to receive guaranteed income for their lifetime. 45. This rider was only available on the Thrivent Financial new Variable Annuity (although it may have also been available on Variable Annuities issued by other firms) and is only for investors who are between 50 and 85 years of age.
The GLWB rider, while in force, guarantees the return of the investment through a series of withdrawals (Guaranteed Withdrawal Amounts). The Guaranteed Withdrawal Amounts are guaranteed for life, even if the accumulated value of the Variable Annuity is depleted.
Under the terms of the GLWB rider, the investor may not begin withdrawals until age 62 and must pay a rider fee, ranging from .50% to .75% (which may be increased at the election of Thrivent Financial up to a maximum of 1.25%).
Furthermore, upon selection of the GLWB rider, the investor is limited in the sub-account options they may select and, after July 2014, investors selecting the GLWB Rider may only choose one investment option in their sub accounts (Thrivent Moderately Conservative Allocation). Transfers to other subaccounts are prohibited.
Moreover, in some circumstances, the department alleges that:
The reason given by the Salespersons and Investment Adviser Representatives for each and every one of these transactions was that the client wanted and would benefit from the GLWB.
However, no economic analysis of the transactions to determine if the client would benefit from the GLWB rider was contained in the records for these transactions and none was conducted.
If you were sold a GLWB rider via Thrivent, we are offering a free portfolio review to determine if you have a possible claim. Â Please contact us via the contact form below or call Jeffrey Salas at 312.803.4963.
{ 0 comments }
