A widow yesterday filed an arbitration claim with the
Financial Industry Regulatory Authority Inc. against
Ameriprise Financial Services Inc., alleging that a broker there failed to properly advise her aged husband on a variable annuity purchase and botched a beneficiary designation.
The claim states that Deborah Amilowski, a broker with the Hauppauge, N.Y., office of Ameriprise, recommended an unsuitable RiverSource variable annuity as an initial investment to the woman's husband, who was 77.
The suit also said that Ms. Amilowski failed to properly identify the beneficiary of the annuity, leading to losses in the client's
trust.
When the client bought the annuity in 2005, he was already over the maximum age for the guaranteed death benefit, making his heirs eligible to receive only the market value of the annuity at time of death, according to the claim.
The investor placed $850,000 into the annuity over the course of a year.
“Essentially he was buying a basket of mutual funds with higher expenses and no guaranteed death benefit — no safety net to protect the assets,” said attorney Marc S. Dobin of the law firm LaBovick & LaBovick PA of Palm Beach Gardens, Fla., who is representing the plaintiff, whose name was not released.
An irrevocable
trust was the original beneficiary of the annuity, but the investor instructed Ms. Amilowski to change the beneficiary designation to a revocable
trust, which would have been more advantageous from a tax point of view, Mr. Dobin said.
According to the claim, Ms. Amilowski told the client the beneficiary designation was switched. After the client died in March 2008, his family found out that the change had never been processed, Mr. Dobin said.
Nearly eight months passed as Ameriprise investigated the problems with the beneficiary designation., and in that time, the account's value slid from more than $1 million to just over $750,000. The annuity was liquidated last October.
“Had Ameriprise liquidated the subaccounts in preparation for paying out the death benefit, or if the company had immediately paid out the subaccounts to the
trust as it was supposed to do, the loss would not have occurred,” according to the claim.
The attorney alleges that Ameriprise of Minneapolis violated state securities laws, as well as Finra rules 3010, which details supervisory requirements for registered representatives, and 2310, the general suitability of recommendations rule.
The widow seeks damages for the allegedly unsuitable annuity recommendation and for the company's negligence in failing to either pay out the benefit in a timely manner or to protect the annuity's value, plus attorney's fees.
Phone calls to Ameriprise spokesman Chris Reese and Ms. Amilowski, the broker, were not immediately returned.
Finra is based in New York and Washington.
