Help with a complaint, please

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Jan 10, 2007 5:53 pm

Been in the business 12 years. I've never had a customer complaint until now.



Long story short sold a single woman (mid 50's) a VA. 6 yrs later she decides to change brokers. He tells her to move the money. The VA company tells her about the back-end sales charge. She complains saying I never told her about it.



Every single statement she's received for 6 years has it printed on the statements.



------------------------------------------------------



My BD never contacted me about this matter. Out of the blue I get an e-mail saying they settled with her for $7K. Thats news to me. Then they nic my commission account for the 7K. Another broker I know said thats "BS" and I should take the BD to arbitration over the matter.



thoughts?

Jan 10, 2007 7:52 pm

Yes, take the time, spend the money, and see an attorney.

Jan 10, 2007 9:16 pm

I work for a big wire and fromerly a bank and I have seen many, many
settlements go through.  Never have I seen a debit to a rep's pay
without them aware months in advance.  This seems beyond odd to me.

Jan 10, 2007 9:19 pm

Thanks, doberman.



But, who do I talk to? I was told that arbitration cases involving less than 10K you don't need an attorney.



I was hoping that someone would offer a detailed reply on what my rights are and what I can do from here.

Jan 11, 2007 11:22 am

Might I just ask... I guess I'm going to play prosecutor here, which is the case you'll hear.


6 Years and a $7,000 CDSC. What was the original Premium? @ 5% the premium would be $140,000. At 1% it would be (obviously) $700M.


If you dropped a 700M ticket and got 6% you got $42,000... What was her liquid net worth when you dropped this ticket? Did you put in over 50% of her LNW into this annuity (that'll hurt)?


The question is why did your BD settle so quickly? What did they see that you are not telling us?


You crammed this woman into a VA at the very top of the market? Or was the market starting to tank when you did so? Where is her principal today versus her initial premium? What did you do for her over the intervening years? If she was up 50% she probably wouldn't be complaining, if she was flat to down, well, that tends to cloud the memory, she remembers something you said about her principal being guaranteed (she forgot that she had to die to collect on the guarantee).


OK so lets put this aside for right now. The course of action that I personally would take first is to try to work it out with your BD. After all, was 7M the totality of the payoff? If so, why are you the only one puking up cash, didn't they take a portion of the commish when you sold it? What about a haircut to the firm when you sold it (did the annuity company give the BD 8% and the firm credited 7% to your grid).


Further, if you are the kind of guy who can drop $42M tickets, your BD might want to settle with you in order to keep your business. And they seem to be the kind of BD that likes to settle. Offer to split the difference with them. The legal channel is always open to you after they tell you to pound salt where the sun don't shine, but at least you'll then have a better look at what you are facing (in other words, if they are really cheesed at you for having done this deal in the first place and they are skeptical of your overall business, you'll be better off knowing this, you time might be better spent looking for a new BD).


Mr. A 


Jan 11, 2007 11:56 am

rrbd...



Thanks for your input.



a) The way I see it.....it's a "he said, she said" case. How can she prove that she wasn't aware of the surrender charges when it's clearly printed on her statements.



I just don't understand why they would settle in the first place. Other than the fact the NASD isn't crazy about VAs.



b) Is it common for a BD to not get your side of the story. Not tell you they are in talks to settle?



Thanks again.

Jan 17, 2007 3:20 pm

is this going to show on your permanent record? check on the nasdr.com page to see if it shows. If there is a settlement it will stay on your record for life. If they did not find anything wrong, it will dissapear after 2 years. It is scary that anyone can sue you and it will show on your record regardless if you are guilty or not.


Jan 17, 2007 3:57 pm
mranonymous2u:

Might I just ask... I guess I'm going to play prosecutor here, which is the case you'll hear.


6 Years and a $7,000 CDSC. What was the original Premium? @ 5% the premium would be $140,000. At 1% it would be (obviously) $700M.


If you dropped a 700M ticket and got 6% you got $42,000... What was her liquid net worth when you dropped this ticket? Did you put in over 50% of her LNW into this annuity (that'll hurt)?


The question is why did your BD settle so quickly? What did they see that you are not telling us?


You crammed this woman into a VA at the very top of the market? Or was the market starting to tank when you did so? Where is her principal today versus her initial premium? What did you do for her over the intervening years? If she was up 50% she probably wouldn't be complaining, if she was flat to down, well, that tends to cloud the memory, she remembers something you said about her principal being guaranteed (she forgot that she had to die to collect on the guarantee).


OK so lets put this aside for right now. The course of action that I personally would take first is to try to work it out with your BD. After all, was 7M the totality of the payoff? If so, why are you the only one puking up cash, didn't they take a portion of the commish when you sold it? What about a haircut to the firm when you sold it (did the annuity company give the BD 8% and the firm credited 7% to your grid).


Further, if you are the kind of guy who can drop $42M tickets, your BD might want to settle with you in order to keep your business. And they seem to be the kind of BD that likes to settle. Offer to split the difference with them. The legal channel is always open to you after they tell you to pound salt where the sun don't shine, but at least you'll then have a better look at what you are facing (in other words, if they are really cheesed at you for having done this deal in the first place and they are skeptical of your overall business, you'll be better off knowing this, you time might be better spent looking for a new BD).


Mr. A 



EXCELLENT, now we are on the right track.