SERIES 6 CANDIDATES, BE CAREFUL TO STUDY FINRA RULE 2330 GOVERNING EXCHANGE OF DEFERRED VARIABLE ANNUITIES
Taking the Series 6 Exam? Be careful that you study FINRA's Rule 2330 governing the ethics and propriety of recommending to a client that he/she exchange one deferred variable annuity for a new one. Take a look at the actual wording of FINRA's Rule 2330: "(1) No member or person associated with a member shall recommend to any customer the purchase or exchange of a deferred variable annuity unless such member or person associated with a member has a reasonable basis to believe (A) that the transaction is suitable in accordance with Rule 2111 and, in particular, that there is a reasonable basis to believe that (i) the customer has been informed, in general terms, of various features of deferred variable annuities, such as the potential surrender period and surrender charge; potential tax penalty if customers sell or redeem deferred variable annuities before reaching the age of 59½; mortality and expense fees; investment advisory fees; potential charges for and features of ...