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Monday, May 13, 2013

Investor Alert on Pension or Settlement Income Streams

The Securities and Exchange Commission and the Financial Industry Regulatory Authority (FINRA) have issued an alert regarding pension or settlement income streams.

The alert warns investors about the risks involved when selling their rights to an income stream or investing in someone else’s income stream.

About Income Streams
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 future.

Typically, recipients of a pension or structured settlement will sign over the rights to some or all of their monthly payments to a factoring company in return for a lump-sum amount, which will almost always be significantly lower than the present value of that future income stream.

The alert includes more information about pension or structured settlement income streams and contains a checklist of questions to ask before selling away an income stream.

View Investor Alert (pdf)