Randall Harris, a broker and investment advisor associated with LPL Financial LLC (CRD 6413), is facing allegations from a customer who claims that withdrawal penalties for annuities purchased in September 2021 were not properly disclosed at the time of sale. The customer dispute, filed on January 25, 2024, was ultimately denied, but the allegations have raised concerns about the transparency and communication practices of financial advisors when selling complex investment products like variable annuities.
According to the disclosure details, the customer alleged that they were not informed about the potential withdrawal penalties associated with the annuities they purchased in September 2021. The customer worked with Randall Harris to purchase multiple annuities in 2020 and 2021, but later faced issues when attempting to withdraw funds after working with a different advisor at another firm.
Randall Harris maintains that the adjustments to withdrawals were disclosed to the customer at the time of sale and that the customer signed disclosure forms acknowledging this information. However, the customer’s complaint suggests that there may have been a breakdown in communication or a lack of clarity regarding the potential consequences of early withdrawals from the variable annuities in question.
Understanding variable annuities and FINRA rules
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Variable annuities are complex investment products that combine features of insurance and securities. They offer tax-deferred growth potential and the option to convert the account balance into a stream of income payments. However, these products often come with high fees, surrender charges for early withdrawals, and potential market risks.
FINRA, the Financial Industry Regulatory Authority, has established rules to protect investors and ensure that financial advisors provide clear and accurate information when selling variable annuities. FINRA Rule 2330 requires that broker-dealers and their registered representatives make suitable recommendations, provide balanced and fair disclosures, and ensure that customers understand the key features, risks, and costs associated with variable annuities.
In this case, the allegations against Randall Harris suggest that there may have been a violation of FINRA Rule 2330 if the customer was not adequately informed about the withdrawal penalties and the potential impact on their investment.
The importance of transparency for investors
The allegations against Randall Harris and LPL Financial LLC highlight the importance of transparency and clear communication in the financial advisory industry. Investors rely on their financial advisors to provide accurate and comprehensive information about the products they recommend, including the associated risks, fees, and potential drawbacks.
When financial advisors fail to disclose critical information or do not ensure that their clients fully understand the implications of their investment decisions, it can lead to significant financial harm. In the case of variable annuities, early withdrawal penalties can substantially impact an investor’s returns and their ability to access their funds when needed.
This case serves as a reminder for investors to thoroughly review and understand the terms and conditions of any investment product before making a purchase. It is crucial to ask questions, seek clarification, and ensure that the financial advisor has provided all the necessary information to make an informed decision. Investment fraud and bad advice from financial advisors can have devastating consequences for investors, making it essential to remain vigilant and proactive in protecting one’s financial interests.
Red flags and recovering losses
Investors should be aware of potential red flags when working with financial advisors, such as:
- Lack of transparency about fees, risks, and potential drawbacks of investment products
- Pressure to make quick decisions without adequate time to review and understand the terms
- Failure to provide clear and comprehensive disclosures about the products being recommended
- Inconsistencies between verbal explanations and written documentation
If an investor believes they have been misled or not provided with essential information, resulting in financial losses, they may have grounds to pursue a claim against their financial advisor and the associated firm. FINRA arbitration is a common avenue for investors to seek recovery of their losses in cases of financial advisor malpractice or negligence.
Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating the case involving Randall Harris and LPL Financial LLC. With over 50 years of experience and a 98% success rate, Haselkorn & Thibaut has a proven track record of helping investors recover losses through FINRA arbitration.
Investors who have suffered losses due to the alleged failure of Randall Harris to disclose withdrawal penalties for variable annuities are encouraged to contact Haselkorn & Thibaut for a free consultation. The firm operates on a contingency basis, meaning clients pay no fees unless a recovery is secured. Investors can reach Haselkorn & Thibaut toll-free at 1-888-885-7162 .
As the investigation into Randall Harris and LPL Financial LLC continues, it serves as a critical reminder for investors to remain vigilant, ask questions, and seek the assistance of experienced legal professionals when faced with potential financial advisor malpractice. By working with firms like Haselkorn & Thibaut, investors can protect their rights and work towards recovering any losses incurred due to improper or misleading financial advice.
