Review of C. Thomas Thames

MY REVIEW CONTINUED FROM PAGE ONE: During the time that C. Thomas Thames was my adviser, a theme continually prevailed: Constant and repeated instructions from Mr. Thames to surrender the variable annuity products (that he himself had just sold me) at HUGE insurance company "contingent deferred sales charge" penalties that Tom also NEVER spoke to me about (when he called for the surrender of these 6 annuities). Back then I was obviously a very naive young person and I made a big mistake by putting my trust in Tom Thames. I now know that annuities are very long-term investments that are absolutely NOT meant to be “traded" like a stock, yet nevertheless that’s what Thomas recommended constantly and repeatedly, and each time after mere months! He was always changing his mind about the previous annuity he sold me, and willfully processing the paperwork to shift 100% of the proceeds to what he called a supposed "new" or "better" annuity. Making matters worse is that Tom Thames instructed me to invest unusually large amounts of my liquid savings into these annuities after instructing me to sell off lots of stocks. That was Tom's "investment strategy" for me even though we all know that variable annuities are not trading vehicles. Back then, had I gotten a second opinion from any registered investment adviser to review what Tom was wanting to do with my account, they certainly would have stepped in and prevented Tom from getting away with this.

Huge Transaction Costs

Due to C Thomas Thames constantly and repeatedly "changing his mind" I paid the following "contingent deferred sales charges" (transaction costs):

Insurance Company

Insurance company early surrender penalty / percentage Duration the variable annuity was held before a sale, or switch of 100% of the money to the next annuity was recommended and then processed by C Thomas Thames.

Company A

Over $6,500 (and somewhere over 7% as a percentage)

Less than 3 months. Tom's initial call to proceed with the surrender actually came after only about 2 months and 10 days! Documentation

Company B

Over $7,000 (and somewhere over 7%)

Over $14,600 (and somewhere over 7%)

Less than 8 months. Documentation

Less than 7 1/2 months. Documentation

Company C

Over $1,100 (and somewhere over 3.5%) Less than 17 months. Documentation

Company D

Over $12,000 (and somewhere over 4.5%)

Just over 8 months. Tom actually had begun the surrender process after only about 7 months and 11 days!

About 4 1/2 months. About 40% of the total contributions to this contract were invested at a later date than the initial investment date!  Documentation

Company A

Over $17,400 (and somewhere over 7%)

About  8 1/2 months. Tom actually had begun the surrender process after only about 8 months and 2 days!  Documentation

Company E



N/A - I ceased having Mr. Thames manage my account

N/A - I ceased having Mr. Thames manage my account

That’s a total of more than $59,000.00 in insurance company early surrender fees paid by me due to C Thomas Thames constantly and repeatedly changing his mind about the previous annuity that he himself had just sold me! It is obvious that surrender fees reduce the value of and the return on your investment. I CHALLENGE AND ENCOURAGE EVERYONE to completely ignore everything I have to say in this review and to instead ask any investment professional (not Tom) if this "investment advice" is not an extreme departure from the standards of ordinary care that would be expected of an investment professional. Ask them if recommending that a client constantly and repeatedly pay huge "contingent deferred sales charge" penalties after mere months is even a remotely suitable investment objective. It should take them two seconds to figure out what was going on.

For the record and as previously mentioned in my old Yelp review, I filed a complaint with the SEC against Tom but was told that the statute of limitations had expired and therefore they could not pursue the matter. Tom has said that nobody has filed a "formal complaint" about him. He cleverly added the word "formal".

Read for yourself: At the bottom of this law web site the author talks about how


" like mutual funds and annuities are not trading vehicles. The purchase and sale of those investments within a short period of time is almost always indicative of excessive trading"

NOTE: I would like to remind readers that in my case we are not talking about the purchase and sale of just one annuity contract. We are talking about a whopping SIX annuity contracts, all at the recommendation of C Thomas Thames!


According to the Securities and Exchange Commission...

"Variable annuities are designed to be long-term investments, to meet retirement and other long-range goals. Variable annuities are not suitable for meeting short-term goals because substantial taxes and insurance company charges may apply if you withdraw your money early."

NOTE: Each and every variable annuity that Tom Thames called for me to surrender did have LARGE insurance company [surrender] charges.


According to Investopedia....

"Other descriptions of suitability include making sure transaction costs are not excessive"

"Examples that may violate suitability include excessive trading""

NOTE: Each and every variable annuity switch that Tom Thames processed came with large transaction costs in the form of insurance company "contingent deferred sales charge" (CDSC) penalties. Annuities are long-term investments yet Tom processed these transactions after mere months (as described above)


And according to C Thomas Thames himself...

....[he] has accused me of making unsuitable recommendations many years ago without offering one scrap of evidence to support his claims.” 2/7/2012

CLICK HERE for my response


Why would any adviser recommend that his client absorb such huge insurance company early withdrawal penalties over and over again?? Just for the sake of argument, outside of trying to generate commission money for himself at the expense of his client, what on earth could be left to explain why C. Thomas Thames would be motivated to keep calling on his client to surrender multiple variable annuity contracts that he himself had previously just sold them in the first place? Ask any expert if there even could be any ample justification for shifting money around constantly and repeatedly from annuity to annuity six times after holding periods of mere months and at a cost of over $59,000 in early surrender penalties. Their answer will be unequivocally no!

Today Tom himself has conveniently offered no specific explanation other than a desperate attempt to suggest that there were market value adjustments, which I quickly dispelled as false. He can't and in fact refuses to even venture a wild guess because there is no acceptable answer!!! Instead he conveniently puts forth a vague and safe response by saying "there must have been a reason" for any know-nothing reader who might believe that annuities with long surrender penalties are trading vehicles.

In putting forth a specific answer Tom would be further exposed. Let me explain....

Just for general argument sake, one common "excuse" that is sometimes used by some advisers to try to get clients to exchange an "old" annuity for another "new" annuity is to take advantage of a wider assortment of sub funds that the "new" annuity has to offer, but that should only be done years later and after the insurance company surrender period has expired! Not months after you just sold your client the annuity, which is what Tom did. When the client has to absorb huge surrender penalties of this magnitude, the excuse of "taking advantage" of new features makes no sense. Is a huge surrender penalty worth paying in order to have more variety of sub-funds? No.

And if Thomas were to perhaps say that having more fund diversity was the excuse for switching one or more annuities, there would be yet another problem: Tom always wanted to shift a full 100% of the money each and every time. The effect of having more sub-fund diversity could have been achieved by simply shifting only a fractional amount of money out of the "old" annuity. In this manner the client pays less surrender penalties, but of course the broker earns less in sales commissions.

Furthermore these so-called "new" annuities (that Mr. Thames sold me) weren't "new" at all. I have recently learned that they had always existed for years before I had even met Tom!

The More You Look the More You See

I have recently learned that the last two variable annuity products (with "Company E") that C Thomas Thames urged me to switch my money to, had already been established at least 5 years before Thomas became my investment adviser! This is according to Company E. This begs the obvious question, if Thomas were to say that these were "better" variable annuities than each of the previous 6 variable annuities that Thomas sold me and quickly "changed his mind about", then why didn't Thomas sell me these 2 "better" annuities in the beginning, thus avoiding the $59,000 in surrender penalties that followed??? To a logical person it follows that either 1) Thomas failed to do his due diligence in picking the right annuities on the first, second, third, forth, fifth and sixth tries and had to have been ignorant of the fact that annuities are not meant to be constantly "traded" in this manner, or 2) Thomas was trying to rack up his 7th and 8th annuity sales in order to earn himself two more lucrative commissions.

It gets much much worse! C Thomas Thames actually sold me the same "Company A" annuity product twice! And of course he instructed me to surrender a full of 100% of that annuity product twice when he kept "changing his mind".

How many attempts does it take for an investment professional to make up his mind anyway? Really annuities are terrible investments to begin with. Then to sell or exchange an annuity within months just one time is insanity. Thomas constantly changed his mind within months on multiple annuity contracts that he had just sold me. In fact leading up to the date that I ceased working with Tom (after he had called for the exchange of yet two more annuities) he had changed his mind on 100% of EVERY SINGLE annuity that he had previously sold me!!! Truly amazing recommendations from someone who says that he has been in the financial advice business since 1975 and has a CFP, a CLU and a ChFC next to his name! By the way Tom used these certifications to gain my trust. I should have known better.

Furthermore, insurance company "surrender fees" typically decline by 1% each year (for up to 7 years or more) until there are no more insurance company "surrender fees", yet as demonstrated by the short time frames listed in the table above, Thomas was obviously in a hurry to move on with each subsequent annuity exchange. Again, all of the annuities that Thomas sold me had long surrender periods of many years. At what point might all of this expensive annuity switching become just absolutely completely unbelievable? It is only logical for me to conclude that the true reasons why C Thomas Thames called on these enormously expensive annuity exchanges was for his own monetary benefit. Again, ask any unbiased investment professional what Tom's motivation was.

Tom withholding critical SDSC information in conversation

It wasn’t until Tom’s final annuity switch instructions that anyone had an actual conversation with me about a “surrender charge” regarding the 6 annuities that were surrendered, not from Tom, but from one of the annuity companies that called me! I blame myself at that point for still putting my trust in Tom, and not getting any outside opinions or council (then or later), and so I approved of the last and final annuity exchange. Afterwards, when confronted over the phone about the surrender penalties, Tom said that he “forgot" to tell me. That's when I began to question whether I should continue working with Mr Thames, but by that time it was way too late. I had already lost a lot of money. Also I didn't find out until many years later that variable annuities are not even considered "trading vehicles" like individual stocks.

As a complete side note of pure education to the casual reader: Be sure to report any adviser to the SEC who tries to get you to surrender an annuity with a surrender penalty. It doesn't matter if the transaction has already taken place and you agreed to follow the recommendation to surrender the annuity by signing the paperwork, you received a prospectus, closing statement, etc. It doesn't make it your fault simply because you followed standard procedure. This is because your broker has a duty to avoid excess account activity designed to generate commissions and fees for him or her rather than gains for you.

What on earth was C Thomas Thames doing giving this type of "advice" in the first place?

Today Tom has openly blamed the client for going along with all of his annuity flipping instructions and for not making a complaint sooner (after the statute of limitations expired). Tom's grand "Ah-ha moment" (or cleverly distractive straw man argument) has been to say that he thinks the client must have received a multi-page book of complex legal talk from the insurance company called a "prospectus" and therefore he says that would be the client's fault for naively following his investment advice to aggressively trade "non-trading vehicles" (variable annuities) multiple times, in large dollar amounts and in short time frames, at a cost to his client in excess of $59,000.What Tom conveniently ignores and isn't telling readers is that by law, advisers have a duty to make sure that their clients not absorb excessive transaction costs. Excessive transaction costs are not suitable to any client because losing money is not an investment strategy.

And just on a moral level, I'm sure that Tom's attitude will sit very well with readers, especially senior citizens. Just put yourself in the shoes of a client. You write a truthful review and the "investment professional" who has a CFP, CLU and a ChFC next to his name proceeds to blame and attack you for his advice.

What any rational person is thinking is something that Tom loves to spend lots of time distract attention away from, and that is what on earth was Thomas Thames doing giving this type of constant and repeated "advice" in the FIRST PLACE???!!! What Tom ignores is that the MERE ACTS of instructing a client to aggressively trade "non-trading investment vehicles" multiple times with multiple surrender penalties is quite an extreme departure from the standards of ordinary care that would be expected of an investment professional! Thomas DID willfully call for and process all of this aggressive annuity switching, and I DID in fact pay multiple surrender penalties because of his recommendations. End of story. How the client reacts afterwards DOESN’T CHANGE Tom’s prior actions. What’s done is done. The issue of this review is not whether the client knew or didn’t know that they were losing money, or knew or didn’t know that variable annuities are not “trading vehicles", received or didn't receive a prospectus, took legal action or contacted the SEC before the statute of limitations expired, or wrote a review back then or now. These are all diversionary and moot discussions. The question of this review is simply whether Tom’s prior actions as an investment professional (adviser, broker, rep, principal, or whatever the title) were wrong, and if so did he have knowledge of the "wrongness" of his actions prior to each and every variable annuity switch. Investment professionals are not supposed to make constant and repeated annuity switching recommendations and then just conveniently blame it on the client. Investors have rights. I hope readers understand that they absolutely have rights. Just ask any any knowledgeable registered investment adviser or attorney. I encourage everyone to learn.

"Readers have to question if Tom was truly serious about letting the truth be known and not deliberately trying to mislead readers he would contact the Sacramento Bee, the Wall Street Journal and local TV stations to do a story about what Tom did. But I can guarantee readers that Tom will never ever do that because he knows full well what an unbiased story would tell."

Media outlets have a duty to report on this story. My only instructions for media outlets is to be responsible journalists by having an independent, objective securities attorney analyze the documents and report on what they have to say about Tom's constant and repeated annuity flipping 'advice'. There is no "other side of the story." Annuities with long surrender periods are not trading vehicles. Period.

CLICK HERE to continue reading my review of C. Thomas Thames

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 I am a former client of C Thomas Thames. Anyone with eyes can read that this site is about my review of C Thomas Thames, the investments he sold me and a discussion about various other issues of public debate. Tom has made the laughable assertion that someone might, I would presume, be confused into thinking that this site is run by Tom himself or his business Thames Financial and Insurance Services, run by a registered investment advisor, or provides personalized investment advice, which is utter nonsense. It is obvious to anyone that the content offered herein is not personalized recommendations to buy, sell or hold securities, and any content on this site does not constitute individual investment, legal, tax or other professional advice. As they say, always consult with an objective registered investment adviser before making financial decisions. This goes without saying.

© 2012