by John Darer CLU ChFC CSSC RSP CLTC
The financial products that are referred to as Secondary Market Annuities and Inforce Annuities ARE NOT ANNUITIES, and a company that markets such products to investors admits as much in this excerpt from their website disclosure, which we applaud (in addition to its comprehesive review of the risks of purchase).
- Pacific Structured Assets (“PSA”) is not registered with the Securities Exchange Commission and is not licensed to sell insurance in any state.
- The ownership of the payment streams sold by Pacific Structured Assets are commonly referred to as Secondary Market Annuities and/or Inforce Annuities. Secondary Market Annuities and/or Inforce Annuities involve the acquisition of future structured settlement payments from current annuitants in exchange for lump sum of cash.
- Although this product is commonly referred to as a “secondary market annuity” or “inforce annuity”, PSA is not buying or brokering annuities or annuity contracts. Instead, customers of PSA are buying specific structured settlement payments due under a pre-existing annuity and the transaction involves the acquisition the right to receive specific future structured settlement payments due under an annuity.
- PSA does not sell or broker annuities or annuity contracts notwithstanding any reference to secondary market annuities or inforce annuities.
- When purchasing structured settlement or annuity payments from PSA, there is no transfer of the ownership of the underlying annuity (even if marketing or other materials from time to time refer to secondary market annuities or inforce annuities).
My question is after one has made all these disclosure, why continue to call an alternative product such as "structured settlement payment rights", "lottery payment rights"or annuity payment rights". something that it isn't in the marketing headlines? Why must a consumer/investor have to look in the small print?
Why not come up with an accurate label for the product that both the primary and secondary market adopts?