Glenn Neasham: One year later, part 2

Editor’s note: In the second half of this two-part interview, Neasham responds to his critics, discusses annuity regulation and Allianz, and talks about what he would do differently if he had another chance.

PW: Some argue that even if you didn’t break the law, you displayed questionable ethics or a lack of foresight in dealing with this particular client. I know you’ve heard these criticisms, as well. What is your response?

GN: I’d worked with Fran for about 12 years prior to her coming in and purchasing the annuity. Lou Jochim, her 15-year live-in boyfriend, was a client for 12 years before Fran came in. They called me and said they had a CD coming and the rate of return wasn’t all that great and they wanted to find something with a better rate of return. They came in on February 1, 2008 and that’s when we did the fact finding and I gave them the brochure. They took it home and read it and we had another appointment scheduled for February 5 but they came back on the 4th and decided to do business with me that day. During the presentation, I noticed absolutely nothing wrong with this client.

About 10 years ago, when I first started in the annuity business, I met a woman who aroused my suspicion and I wouldn’t help her. I refused to help her. I didn’t notice anything at all with Fran. Nobody took advantage of Fran, she seemed totally fine on that day. As a matter of fact, after my conversations with the bank, when Fran came back in with a check, she came into my office and was standing on the other side of my desk and I said, “Fran, do you have any questions about the annuity? Do you understand exactly what we’ve done?” and she said, “Yes.” And with a big smile on her face, she gave me the check. It was a very clean, straight-forward deal as far as I was concerned.

The only red flag I had was the fact that the son wasn’t the beneficiary, because that particular money was her husband’s money, and if it was my dad and my mom passed away and my mom got remarried, I’d want my dad’s money to go to us kids, not to somebody else. It was really confusing why they were naming the daughter of Lou Joachim the contingent beneficiary, but they told me they’d had a falling out for years with the family. That was why I had them sign an addendum in the first place, to clarify why she was naming Lou the primary beneficiary and his daughter as the contingent.

I even tried to get her son to come to a client appreciation dinner and sit next to her to try to work out their differences. In addition to that, Lou was already the beneficiary of the CD at the bank and had been for quite some time.

PW: With the perspective of time, is there anything you regret about the sale?

GN: No. Nothing whatsoever. I feel like I did everything I could. I didn’t just have people come into my office to sell them something. Like I said, I had known Fran and Lou for years and when they called me about the CD, I had them come in and we did a fact finding. And after reviewing the information on the annuity, they came in a day early for the full presentation where I spent about an hour and a half going through the presentation with them. According to Fran, it fit all her needs. She didn’t need liquidity, she was left with about $100,000 in liquidity and the annuity gave the option of a 10 percent free withdrawal. If she went into a nursing home, she could have taken out 20 percent of it per year without penalty. But between the $100,000 left over and the money coming out of the annuity, which was close to $40,000 more per year, it would have covered nursing home expenses.

The bottom line was, she wanted to leave it as a legacy product. She didn’t care about having her hands on that money.

PW: Some have said that due to certain concerns about variable and indexed annuities and sales to seniors, the products themselves should be the targets of further investigation, rather than those who sell them.

GN: Would you want your 80-year-old mom’s money in the stock market? Is it fair that the bank is selling less than 1 percent on a CD right now? Annuities are great products that provide people with peace of mind and a future income stream. That something that was very important to a lot of my clients. Now, it wasn’t important to Fran, she didn’t care about the future income stream, but the option was available.

That’s a big concerns for seniors — they don’t want to outlive their money. So what do I think about regulating or taking away the opportunity for seniors to purchase annuities? No, I think it would be completely wrong.

PW: What are your thoughts on the role Allianz played in your case?

GN: A lot of people thought Allianz should have come to my rescue; that they should have hired counsel for me and helped me in court. But I’ve spoken to Allianz since the conviction and they’ve stated that once this is all over, there’s a good chance that I can come back to work with them. I like Allianz. I think it’s a great place to put money. As a matter of fact, I purchased four of those fixed indexed annuities myself and three of them were the MasterDex 10.

PW: So despite some people saying they left you out to dry, you feel you have a good relationship with them?