Citizens Financial Group is punishing its brokerage force for targeting elderly bank customers in the sale of its high-risk variable annuities. How? By taking away the things brokers love: Red Sox playoff tickets, limousine trips to Mohegan Sun, golf outings and other perks of the job.
Providence-based Citizens recently settled with Massachusetts' regulators to the tune of $3 million for inappropriately selling high-risk VAs to elderly customers. As part of the settlement, the firm also agreed to allow customers 75 years old and older, who bought the annuities in 2003 and 2004, to surrender all or part of the investment without penalty. Citizens also offered to refund any surrender penalties already paid by customers who fit in the same category.
“The policy removes any appearance of undue influence from an outsider, so the customer is confident they are receiving independent, unvarnished advice,” said a Citizens statement about the changes. Robert Mahoney, Citizens Financial Group vice chairman, added: “Our first priority is to our customers. We've taken these aggressive steps to increase oversight to ensure we are maintaining the highest ethical standards.”