December 5, 2018

Ohio National Ending Broker Contracts And Annuity Trails For Advisors

Soreide Law Group logo

Ohio National Ending Broker Contracts And Annuity Trails For Advisors

Soreide Law is investigating possible claims on behalf of advisors who have contracted to sell annuities through Ohio National Financial Services Inc. (Cincinnati, Ohio) – a company that markets financial and insurance products through the Unites States and abroad. The firm is considered a top 20 issuer of variable annuities based on its $1,300,000,000.00 in annuity sales in 2017. Surprisingly; however, Ohio National reported in September 2018 that it would cease sales of retirement accounts and annuities. Even more surprisingly, Ohio National recently stated that on or about December 12, 2018, it will no longer pay commission trails to advisors that have sold its annuities.

Ohio National Financial Services Cutting Commission Trails; Severing Data Feeds

Ohio National sought to sell its annuity business to adopt a new strategy centered on disability income insurance and life insurance. Unfortunately, after having failed to generate a target buyout offer on variable annuities, Ohio National revealed that it will not be paying trailing commissions to certain representatives such as those who sold their annuities with a guaranteed minimum income benefit rider.
Apparently, Ohio National only intends to keep in place the trails and servicing abilities for advisors associated with Ohio National Equity Equities, Inc. (CRD#: 41081, Cincinnati, Ohio). Apparently, aside from Ohio National’s broker-dealer, the only broker-dealer spared from the impact is Morgan Stanley. As a result, many broker dealers are expected to be cut off from data feeds and annuity trails.
The firm faces backlash on the decision. Supposedly, stripping advisors’ abilities to service variable annuities interferes with their fiduciary obligations, negatively affecting policyholders. Particularly, the clients will likely be forced to consult Ohio National directly regarding buyout offers. This seemingly presents a risk that the clients’ best interests may not be served because of the advisors’ inability to vet those offers.

Ohio National Financial Services Sued For Breach Of Contract

Moreover, advisors now face a significant hit from a financial angle, as the gutting of trailing commissions impairs and devalues their book of business. As a result, advisors are likely to demand upfront commissions rather than any alternatives indicative of trailing commissions. One LPL Financial VP described Ohio National’s decision as “unprofessional and disrespectful.”
Ohio National has become subject of legal actions as a result of its decision. Particularly, since the decision was made, two lawsuits have been lodged against Ohio National. The claims were filed in the United States District Court for the Southern District of Ohio. One of the suits was brought by LPL Financial advisor Lance Browning; the other by broker-dealer, Veritas Independent Partners.
Browning contends that LPL’s selling agreement with Ohio National entitles him to commission trails totaling $89,000.00. His principal argument is that Ohio National was not allowed under contract to unilaterally terminate its obligation to pay the commission on existing annuities; the firm’s failure to conform to the contract was a breach. Veritas also claimed that Ohio National committed a breach of contract. Apparently, both cases could turn into class-actions.

Soreide Law Group Investigating Possible Remedies For Advisors

Lars Soreide Highest Ethical Standard Award 2018

Lars Soreide Highest Ethical Standard Award 2018

Advisors who are under contract with Ohio National to be paid trailing commissions on annuities can call Soreide Law Group at (888) 760-6552 for a free consultation with experienced counsel regarding their legal rights and remedies.

Recent Posts

March 28, 2024
Al Lovelace In Investor Disputes Over Annuity Misrepresentation

Soreide Law Group is investigating potential investor claims of sales practice violations possibly committed by securities broker Al Stephen Lovelace [CRD: 2393766, Rutherfordton, North Carolina], given the disclosures on FINRA BrokerCheck. Evidently, Lovelace has worked for Equitable Advisors LLC since December 27, 2016, and worked previously at AXA Advisors LLC from October 2, 2008, to […]

March 28, 2024
KAREN CHUNG of WESTERN INTERNATIONAL

Soreide Law Group is conducting an investigation into WESTERN INTERNATIONAL SECURITIES, INC. of Pasadena, California, financial advisor, KAREN TRAN CHUNG (KAREN CHUNG). According to FINRA’s  BrokerCheck, KAREN CHUNG, has been in the securities industry for 20 years and has been listed with 4 firms.  She is currently listed with, WESTERN INTERNATIONAL SECURITIES, INC., 70 S. […]

March 26, 2024
Stifel Fined $400K by FINRA

According to a recent article in Wealth Management, Stifel will pay over $400,000 to settle FINRA disciplinary charges that the firm allegedly did not properly supervise one of their registered representatives who misappropriated over $100,000 from an elderly client. Stifel agreed to the penalties without admitting or denying FINRA’s findings. In addition to a $400,000 penalty, Stifel […]

Contact us Nationwide USA
2401 E. Atlantic Blvd., Suite 305, Pompano Beach, FL 33062
Helping clients recover money across the USA
search
Copyright © 2022 Soreide Law Group, PLLC  |  All Rights Reserved
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram