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Lincoln Financial Advisors Fined by State Regulators

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Lincoln Financial Advisors is a Fort Wayne Indiana based brokerage firm. It was formed in 1968 and is majority owned by The Lincoln National Life Insurance Company. In large part, Lincoln Financial Advisors serves as an in-house sales arm for the various products of the Lincoln National Life Insurance Company, including Exchange Traded Funds, (ETFs), Real Estate Investment Trusts (REITs) and other financial products.

Lincoln Financial Advisors was fined by a state regulator $100,000 for selling non-traded REIT (Real Estate Investment Trusts) in excess of permitted concentrations. (May, 2013 E-2013-0047)
Real Estate Investment Trusts (REITs) have flourished in the last decade, being sold by stockbrokers as a way for people to invest in large commercial real estate projects. Many of the REITs are non-traded; that is, not traded on any major exchange. This makes the investment very illiquid. A person can’t sell the investment easily, to finance a need such as major home repairs or medical needs. Because the investment is so illiquid, it is important that the stockbrokers recommending it don’t sell a person more than they can afford to be without.

Many times, the first indication that a senior has been sold the wrong product by a a stockbroker, or too much of a product, is when a family member learns of a sudden unmet financial need of the senior. A well-off senior should have access to sufficient funds to pay for a major expense that occurs. After all, many investments are very liquid, and can be sold on a public exchange, so the senior can have money quickly if needed. A broker that recommends too much of an illiquid investment, that can’t be reached, is really putting the senior in peril.

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