February 20, 2004
I was a victim of a financial advisor who advised us to put our retirement funds I was 63 at the time into a variable annuity with Putnam/Allstate in 2000. I was seeking advice on what to do with my IRA that I was getting 7 each year until 2003. I was not familiar with mutual funds or annuities but this advisor convinced me that when I retired in a couple of years that if I wanted to have a nice nest egg I should invest in this variable annuity. He picked safe funds and against my wifes better judgement I handed over my life savings. I lost over half 90K and I am 67 and still working. I take the responsibility for not being familiar with the way funds work. I should have researched this before I signed with this man but he was so ernest and represented what I thought were good companies. Putnam, Allstate and Cadaret,Grant Co. When I complained to my advisor when I started losing money which was immediately he told me to keep the faith and this is the way the market worked and if we took our money out we stood to lose a lot of money. After we threatened to take our money out of Putnam and just take the loss Putnam finally sent out a senior vice President who put us into an IRA that is still an annuity but we get 3 and again tried to convince us to stay in this fund. We were not told of the risks that we were taken - indeed the only paperwork we received was books extolling how great the funds were. The cavalier attitude that Putnam/Allstate and our financial advisor who worked for Cadaret, Grant Company was that other people have lost more than us was more than we could stand. Now Putnam is disclosing more about its practices and giving investors more information - too late for us.
We know it would be good to require brokers to disclose in detail specific information about fees and expenses. We were told it was costing us nothing for this annuity and very frankly this financial advisor was just lining his pockets with no regard to us as his clients. Most certainly they should require brokers to tell you how much they and their firm stand to benefit from this purchase. We realized to late what we had done and lost half of what I worked for for 37 years. There has to be ethics involved also. We should never have been put into a variable annutiy at our age - we didnt need the insurance but this advisor told us that this was just a bonus. When we heard of all the abuses with Putnam we wrote to the SEC Nov 2003. Something had to be done here - no one should have to go through what my wife and I have been through.
Your forms are clear and concise and definitely communicate the information I would have needed to make a wise decision.
These forms could certainly be valuable for me in the future. Please pursue this. If this had been available to me in 2000 I would have certainly realized that this annuity was benefiting everyone but myself.