He is extremely critical of the high-risk strategies and products regularly palmed off onto unsuspecting investors. "The way these products are designed from the insurance company's perspective is 'heads up we win, tails up you lose'," says Marron. "Any way you slice it, the house always wins and they always get their commission."
Marron advises people to make sure their parents do not fall for a slick sales pitch that promises their principal investment will never decrease. "Many of my clients have been told the original investment is insured," Marron says. "That's what they tell them—and it is completely false. These are not appropriate investments for older, retired or conservative investors."
There is also a whack of extra charges attached to them. "The big thing you have to understand is that just to take your money out you get hit with a 7 percent surrender charge," says Marron.
Marron's firm in San Diego recently filed two statements of claim on behalf of elderly investors whose life savings were seriously dented by investing in Variable Annuities.
An 80-year-old man from San Marcos, describes himself as someone who was not interested in taking risks or gambling with his savings. He and his wife were counting on their IRA to help them through their remaining years. His AIG advisor put his $386,000 or about 80 percent of his life savings, into a variable annuity. He was assured it was safe from market volatility and the principal would never decrease. In fact, according to the statement of claim, the money would grow 7 percent a year.
Instead, Attorney Ron Marron's client saw the annuity start to decline in value. Alarmed by what was happening, he told AIG he wanted out of the variable annuity. The exit penalties plus the decline in asset value cost Marron's client $87,000.
Consider the experience of another of Marron's clients---a 77-year-old widow, who described herself as 'a conservative widow', with a total life savings of $160,000. Citigroup Global Markets advised her to put 50 percent of IRA into a variable annuity described to her as a safe and secure investment. Her adviser told her she 'might even make a little' according to the statement of claim filed by her attorney Ron Marron. The investment cost Marron's client $50,000. She will now have $110,000 to see her through nursing home costs or whatever she may need to care for herself in the years ahead.
"To have 50 per cent of her net worth in a risky variable annuity is not appropriate. These annuities are full of volatile stocks and bonds," says Marron. "She had very little money, now she has even less!"
Marron's strategy is to recover the money lost in both cases through an arbitration process that is available to investors who believe they have unfairly dealt with.
He believes he can recoup the cash for his clients.
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Marron has seen so many investment dealers take advantage of people, he invites anyone to call him free of charge for advice before they turn over their hard earned cash to some complicated, difficult to understand investment product.
"These products are impossible to understand, and that is why you need somebody to look at them for you. I won't charge if you call," says Marron. "We work on a contingency fee basis. If you aren't sure, call me."
Ron Marron's firm is an insurance and securities litigation firm that helps investors who have been taken advantage of. Marron has a Bachelor's degree in Finance from the University of California and a law degree from the University of California South Western School of Law.