A question about discretion
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Can an advisor with discretion in an account put a client into a annuity contract?
Nope, I’m afraid we’ll have the client register a complaint against the broker.
You may want your process of discovery to include more than asking strangers on the interweb.
This thread isn't making any sense to me. People can buy most investments without having to sign anything once the account is opened. An annuity is a contract. The owner must sign the contract. Therefore, it can't be purchased without the owner agreeing to it. So, how would an advisor put a client into an annuity without the client agreeing. No client signature = no annuity.
[quote=anonymous]
This thread isn't making any sense to me. People can buy most investments without having to sign anything once the account is opened. An annuity is a contract. The owner must sign the contract. Therefore, it can't be purchased without the owner agreeing to it. So, how would an advisor put a client into an annuity without the client agreeing. No client signature = no annuity.
[/quote] We are all on the same page. Plus, doesn't discretion only apply to securities that a client is approved for? (Rhetorical)My guess would be that said advisor bought an annuity and forged the contract and is just keeping the policy in his office so the client never sees it and that it was signed. Then if ever questioned, the broker plays it off like it’s no different than buying stocks/mutual funds in his account w/o approval, etc.
Why a broker would try to pull that off is beyond me but obviously there are plenty of crooked people out there that think they can get away with anything. I'd think if you have discretion already, the client must trust you to a good degree. If you think an annuity is appropriate, why not just tell them that's what you're moving their money into but I need a few quick signatures and do it by the books.Next the question will be, if I have discretion can I buy a car for my clients investment, oh and they dont have a place to put it, so they want their advisor to drive it. Wow is all I can say.
[quote=anonymous]
This thread isn't making any sense to me. People can buy most investments without having to sign anything once the account is opened. An annuity is a contract. The owner must sign the contract. Therefore, it can't be purchased without the owner agreeing to it. So, how would an advisor put a client into an annuity without the client agreeing. No client signature = no annuity.
[/quote] The client has written letters to both the annuity company and the wirehouse firm. He received a letter from the annuity company stating they had forwarded his complaint to the wirehouse. In previous conversations with the wirehouse manager he has not shown any interest in placating the client. If that is still their position after the written complaint, what would be a next step? State insurance department? Finra? Retain an attorney?[quote=Fred Garvin][quote=anonymous]
This thread isn't making any sense to me. People can buy most investments without having to sign anything once the account is opened. An annuity is a contract. The owner must sign the contract. Therefore, it can't be purchased without the owner agreeing to it. So, how would an advisor put a client into an annuity without the client agreeing. No client signature = no annuity.
[/quote] The client has written letters to both the annuity company and the wirehouse firm. He received a letter from the annuity company stating they had forwarded his complaint to the wirehouse. In previous conversations with the wirehouse manager he has not shown any interest in placating the client. If that is still their position after the written complaint, what would be a next step? State insurance department? Finra? Retain an attorney? [/quote] How long ago did the client send the complaint to the B/D? The client should be getting contact from the firm's compliance department notfying them that an investigation is underway. What sort of damages have been incurred?It’s been 3 weeks since he sent the letters. Still nothing from Merrill. The broker put $350,000 in the VA. It’s now at about $225,000. The client is just really frustrated that he was put into this contract(with 7 year surrender) and he never agreed to it. Should he call the Merrill manager again?
I wouldn’t start at FINRA. 3 weeks is not a lot of time. I would have started with Merrill’s Compliance Department - although the Branch Manager isn’t a bad start, he would just fwd to the CD.
The reason I wouldn't start with FINRA is that it totally skips the pre-negiotiations / settlement. I would let Merrill determine if the complaint has merit, and see what their "offer" would be. If it is unsatisfactory, then go to FINRA. Eventually, it would go to FINRA anyway. Ofcourse you are dealing with Mother Merrill, and they could tell you to F off.He tried to call Merrill corporate this week and couldn’t get anyone, only voicemail. Maybe they will address this after the holidays.
Just send a letter to the compliance department of Merrill. Or he can rewrite the branch manager and cc Compliance.
Merrill Lynch Attn: Compliance Department[quote=Wet_Blanket]Just send a letter to the compliance department of Merrill. Or he can rewrite the branch manager and cc Compliance.
Merrill Lynch Attn: Compliance Department[/quote] He has already sent letters to AXA and Merrill corporate. AXA sent him one that said they had forwarded his complaint to Merrill. He has heard nothing from Merrill in 3 weeks. I am assuming he needs to keep the pressure on at Merrill to get them to respond.