CFO Sink Adds Link to Myfloridacfo.com to Guide Floridians on Equity Indexed Annuities
Tara Klimek or Nina Banister
TALLAHASSEE—Florida Chief Financial Officer Alex Sink has created a link at MyFloridaCFO.com to help consumers better understand equity indexed annuities, which have become big sellers despite being a relatively new and complex annuity product. Annuities were the subject of a hearing Wednesday before the United States Senate’s Special Committee on Aging that addressed reported marketing abuses.
Often touted as a way for investors to realize stock-market-like gains without the risk, equity indexed annuities have proven confusing to some investors who have complained to the Department of Financial Services Consumer Helpline of being misled about how the product works or not having their expectations met. These products can come with hidden penalties, costs and fees, and hefty multi-year surrender charges and may not be ideal for some senior citizens.
“As with any investment product, it is important for consumers to read and understand any document before signing and get all agreements in writing,” said CFO Sink, who oversees the department. “Our aim in providing this link is to help consumers ask the right questions to protect themselves and invest their money in a way that best serves their needs.”
To view the Equity Indexed Annuities link, go to MyFloridaCFO.com and click on the Equity Indexed Annuity Alert button on the right side of the home page. The link includes definitions of key terms relating to equity indexed annuities, explains fees and charges that may be incurred, points out important questions to ask and provides warning signs of potential fraud. Consumers with questions or complaints regarding equity indexed annuities should call the department's Consumer Helpline at 1-800-342-2762 or log on to MyFloridaCFO.com.
In July, CFO Sink revoked the license of a south Florida insurance agent and ordered him to pay a $40,000 fine for targeting senior citizens between the ages of 75 and 90, some suffering from dementia, for the sale of unsuitable annuity products. In one instance, Joseph John Ripa, 48, convinced an 83-year-old retiree seeking supplemental retirement income to invest his entire liquid net worth in an equity indexed annuity that provided no immediate income and carried 13 years of surrender charges as high as 17 percent.
Ripa was aware that the products he was selling were unsuitable for the seniors he targeted, but concealed that fact by failing to disclose to his clients the applicable surrender charges and penalties, along with other potentially harmful features of the products.
As a statewide elected officer of the Florida Cabinet, Chief Financial Officer Alex Sink oversees the Department of Financial Services, a multi-division state agency responsible for management of state funds and unclaimed property, assisting consumers who request information and help related to financial services, and investigating financial fraud. CFO Sink also serves as the State Fire Marshal.