““I purchased an annuity from a financial planner and found out, after the fact, that what he sold me and I agreed to is not the same product that I purchased through him. He pre-filled the application and showed me where to sign. I feel foolish for not understanding how this annuity works.
I am disappointed that he presented himself as a fiduciary and told me this product would provide me guaranteed income, liquidity, and stock market returns. I now realize that the income guarantee, liquidity, and returns are not as straightforward as he described and appear to be costly versions of benefits I could have achieved with less complexity and lower fees. Do I have any recourse? Would hiring a new financial advisor help me figure out what to do?”
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When an Annuity Isn’t What You Thought
Annuities, while promising stability, growth, and flexibility, often present a complex web of fees and fine print. If you haven't read it yet, consider reviewing a previous article I wrote, "The Three-Legged Chicken of Investments: Why Guaranteed Products Aren't Always What They Seem."
Since you have already purchased the product, you can take the following steps to try and get out of the contract.
1. Check for a “Free-Look” Window
Most annuities include a free-look period—usually 10–30 days after you sign—during which you can cancel for a full refund of premiums.
Action: Pull your contract (or request a copy from the insurer), note the signature date, and confirm if you’re still within that rescission window.
Why it matters: A timely rescission lets you walk away without surrender charges.
2. Audit the Fees and Benefits
The product illustration isn’t always what appears in your contract. Day-one bonuses, “guaranteed” income, and liquidity riders often carry annual fees north of 1.5%–2%, far more than a DIY bond ladder or low-cost ETF or mutual fund lineup.
Action: Line-item every fee—rider charges, administrative fees, surrender schedules—and compare to a simple portfolio of bonds and equities.
Why it matters: You’ll see whether each feature’s cost outweighs its benefit.
3. Gather Your Documentation
A clear paper trail is essential—whether you decide to negotiate or escalate.
Action: Collect illustrations, prospectuses, emails, meeting notes, or recordings.
Why it matters: Written proof demonstrates the difference between what you promised and what you actually received.
4. Send a Written Complaint and Escalate if Needed
Before going external, give your planner a chance to make things right in writing.
Draft a letter: Summarize the promises versus actual contract terms, cite specific discrepancies, and request remediation (e.g., contract cancellation, fee credits) within a clear deadline (30 days is reasonable).
Send via certified mail: This provides a dated, trackable record.
Escalate if unsatisfied: If you don’t get a substantive response, send your complaint to the advisor’s compliance department or supervisor. Then, consider filing a complaint with the insurer’s ombudsman or state insurance commissioner’s office. If the planner is broker-dealer registered, FINRA arbitration may apply. You can also report a CFP® designee to the CFP® Board.
5. Consider Getting a Second Opinion
An independent, fee-only fiduciary can:
Decode the fine print: Clarify your true inflation-adjusted income potential.
Model exit strategies: Quantify the cost of surrendering or exchanging the contract versus riding it out.
Chart a simpler path: A straightforward bond/ETF mix or bucketed cash-flow plan may deliver similar outcomes at a fraction of the cost.
Optimize withdrawals: If you are past the “free-look” window and don’t want to escalate the issue past asking the original advisor, you likely still have options for minimizing the cost of ownership through annual withdrawal exclusions.
Bottom Line
Although it hurts to feel misled, you're not helpless. Start by checking your free-look window, auditing fees, and documenting promises in writing. If your advisor is unable to resolve the issue, you might consider reaching out to the advisor’s compliance department or regulators. Finally, you may want to engage a fee-only fiduciary (like me or try the National Association of Personal Financial Advisors “Find an Advisor” tool) to ensure a cost-effective and transparent strategy for the future, preferably one that does not involve the sale of three-legged chickens.