Williams Dirks Dameron Investigates Reverse Churning

Annuities in Advisory Accounts


Has your financial advisor recommended that you purchase an annuity (such as a product offered by Allianz or Prudential) and thereafter charges you an annual or quarterly fee for financial advice fee in the form of a percentage based on the value of that annuity (e.g. 1% per year on a $100,000 annuity)?  If so, this may represent reverse churning and you may be entitled to damages.  Reverse churning occurs when a customer is in such an annual or quarterly fee-based account but where there is little to no activity to justify the fee.  Essentially, the financial advisor gets the percentage fee for doing nothing.  And where you have been placed in an annuity product inside such a fee-based account, the annuity allows for only certain sub-accounts, which means there is little to no advice required for that investment. 

For more information, contact Matt Dameron at (816) 945-7110 or matt@williamsdirks.com.