Investors wanting to sell their rights to an income stream or investing in one that belongs to someone else need to be aware of several risks, the SEC and FINRA warned.
In an alert issued Wednesday on what investors need to know before buying or selling pension or settlement income streams, both agencies said investors also need to know what conditions come with promised higher yields.
Anyone receiving a monthly pension or regular distributions from a settlement following a personal injury lawsuit may be targeted by salespeople offering an immediate lump sum in exchange for the rights to some or all of the payments the person would otherwise receive in the future, the SEC said.
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