John Hancock summarily notified customers and its variable annuity sales force last year that it was replacing 44 “outside” funds offered as variable annuity sub-accounts with its own proprietary funds.  One Hancock financial adviser commented that it was a “bait and switch.”  A Hancock spokesman refused to rule out the possibility that investors would pay more fees for the new funds.  Hancock offered various administrative explanations for the abrupt change, but observers believe that the purpose was to capture fees being paid to outside funds.

In an Investment News article published on October 2, 2006, Page Perry partner Jason Doss was quoted as follows:  “Insurers want to use their own funds because they want to get paid twice: once for the VA and once for the underlying mutual funds.”

Investment News, October 2, 2006, John Hancock to replace 44 outside VA mutual funds; Substitution with proprietary offerings irks adviser.