I have a friend (M 48) whose mother recently passed away -- and he inherited >$500k from her IRA and investment accounts all together.
He was supposed to go visit with a financial advisor - a referred 'family friend' in a small Texas town - to get some input on how best to handle this windfall.
I also offered to be an impartial ear once he finally got the details of his inheritance and input from the financial advisor, if he wanted someone to talk to about it. He isn't used to managing large amounts of money and with his mother's passing, I think he found all the decisions he was having to make overwhelming. I told him not to worry, suggested he meet with a couple of advisors to figure out his strategy (and go from there). But whatever he did -- take it slowly. No need to rush into anything.
Well tonight, I learned the person he went to meet with for 'advice' was also the one who had been managing his mother's accounts. Going into it, my friend's original intention was to close out that relationship and get the funds in his mom's accounts moved over to a new brokerage or bank account in his name, then move ahead with an investment strategy in the coming months when the dust was settled. That's not what happened.
Faced with the prospect of this large account being cashed in and walking out the door, this so-called 'trusted family connection' convinced my friend to put ALL of that money into an annuity (sold through them, of course).
Am I wrong in thinking he is far too young to be putting that much money (if any at all) into an annuity? I don't think he realizes what he's done. Even worse, I feel like this person took advantage of him during while he was grieving -- and saw his inability to process / decide what to do next, then pounced.
I know 'generally' Texas has a 20 day 'cancellation' period -- but if it has gone beyond that, and he changes his mind, can he get out of this? How big of a financial hit would he take if he did? What resources can I share with him about annuities?
I'm trying to be gentle with my friend, but this seems like an epic financial disaster...
Submitted October 22, 2021 at 11:20PM by bunnyrific https://ift.tt/3vANDyK
