THUMBS DOWN: Salt in the Wounds

Physician's Money Digest, May 15 2003, Volume 10, Issue 9


As if the current bear market hasnot done enough damage, your brokermay be adding to your woes.According to an report, unethical brokers have a slueof tricks to fatten their wallets whileemptying yours. One of the favoriteploys is sticking clients into variableannuities, which pay fat commissions,some as high as 17%. The pitchto the client is tax-deferred growth,but many brokers put a client's IRAassets, which are already growingtax-deferred, into annuities so theycan reap the juicy commission income.Then there are the financialadvisors who collect a percentage ofassets under management and thenbeef up their income with the heftycommissions they earn by puttingtheir clients into variable annuities.Doctors, perceived as wealthy, makefor juicy targets.