Investors who are approaching retirement are often targeted by brokers and invited to free investment seminars. In some cases, the broker encourages investors to take one or more of the following actions:
- Retire earlier than they might otherwise have done;
- Opt out of the company’s retirement plan or 401(k) plan and take a lump-sum payment;
- Open a traditional IRS at the broker’s firm;
- Invest in variable annuities, equity-based annuities, Class B mutual funds, and exchange traded funds that are substantially riskier than the fixed benefit pension they gave up.
These recommendations are often coupled with the broker’s false promises that the investor can receive higher monthly retirement income and can grow the investment with little or no risk. As a result of this bad advice, many individuals have lost their entire “next egg.” Page Perry has found that, in many cases, the client’s financial professional misled them about their investments by locking them into excessive withdrawal rates and exposing their portfolios to huge risk without adequate disclosure. Even worse, most retirees do not understand that they were misled or that they may have legal rights to recover the losses that they sustained.