C. Thomas Thames Responds to One-Star ReviewI am C. Thomas Thames, and this is my response to the "ONE STAR REVIEW" that was written by Peter Dzoghi of Pacific Palisades, CA. I am also known as Tom Thames, CT Thames, and Carroll Thomas Thames. I do business as Thames Financial & Insurance Services and Thames Tax & Retirement Services, with offices in Elk Grove and Folsom, CA. Peter Dzoghi is also known as Pete Dzoghi, and he has used several aliases to post his One-Star Review.
SUMMARY OF MY RESPONSE TO DZOGHI'S REVIEW: Despite the thousands of words he and I have written, Dzoghi's complaint is very simple. He claims that I sold him a few variable annuities, and soon after that, recommended that he exchange some of those products for other variable annuities. He evidently thought my recommendations made sense, because he did in fact, make the annuity exchanges. Then, about 20 years after all the annuity exchanges were completed, he posted his one-star reviews on the internet and claimed that the exchanges were not in his best interest and that I did not inform him of the surrender charges he had to pay. NOTE: For all the variable annuity exchanges, there were at least 5 parties involved. The agent (Thames), the client (Dzoghi), two insurance companies, and the investment brokerage firm. The insurance companies and investment brokerage firm all had their own rules about annuity exchanges and exchanges were not allowed unless they were deemed suitable by both the receiving insurance company and the brokerage firm. Variable annuity exchanges are one of the most scrutinized investment transactions and agents must provide reasonable justification for any exchange. I don't deny selling Peter Dzoghi the original variable annuities and I don't deny recommending that he replace some of them soon after they were purchased. Nor do I deny that Peter paid significant surrender charges when those exchanges were made. I no longer have records of the transactions, and that was a long time ago, so I can't say why I recommended the exchanges, but I can say that I have never recommended anything that I didn't believe was in the best interest of my client. And I can say with absolute certainty that Peter knew why I recommended each one of the exchanges; and that without his approval and signature they would not have been made. And Peter was definitely aware of the surrender charges he would have to pay. The insurance company records will show that he acknowledged receiving a prospectus for each variable annuity. Those prospectuses included all the fees and expenses associated with the purchase, management, and surrender of the annuities. Peter can falsely deny that I explained the surrender charges, but he signed documents acknowledging that he received the prospectuses, and I don't think he has ever denied that. But he has said, in writing, that no one should be expected to read them. Peter has admitted that he made profits from the variable annuities I recommended, and he has complained on the internet and his website about having to pay taxes on those profits. And he has also complained about having to pay federal and state tax penalties because he took withdrawals before age 59 1/2. But that's between him and the tax collectors. He has never claimed that I told him the profits would be tax-free, and he was definitely informed of the state and federal tax penalties for withdrawals prior to age 59 1/2. Peter Dzoghi's complaint is about variable annuities, and while I disagree with much of what he has said about annuities and certain investment products, I must admit that I agree (to some extent) with three of his observations about variable annuities. (1) Peter has said that some variable annuities have high fees (3% or more), and I agree. Over the years, I have come to the conclusion that the annual fees on most variable annuities are too high. (2) Peter has also said that young people should never lock up their money in an annuity. That's because annuity withdrawals before age 59 1/2 may be subject to state and federal tax penalties. And for many young people I would agree with Peter. In fact, I have never sold a variable annuity or any other tax-deferred annuity if I had any reason to think the owner would be taking withdrawals before age 59 1/2. On the other hand, if a young adult has a substantial investment portfolio and is investing for long-term needs (such as retirement), I believe adding tax-deferred products to the mix is a strategy that should be considered. (3) Peter has also said that variable annuities pay outrageously high commissions. The only variable annuity I would recommend today is a low-fee product that pays no commission, but several years ago when I was selling variable annuities, the commissions were higher than commissions on most other investment products. And that may be one of the reasons why variable annuities were (and still are) recommended by so many stockbrokers. The ability to earn commissions on the sale of investment products is a conflict of interest that no investment broker can deny. And like all stockbrokers selling variable annuities and other investment products in the early 1990s, I was not exempt from that conflict of interest. In those days, commissions were my primary source of income, but I have never let the size of the commission influence my recommendations to clients. Peter Dzoghi will dispute that, but he has no idea of what I have recommended to other clients. But he does know, and can easily confirm, that no client of mine (other than him) has ever posted a negative review about me on the internet. And a review of the public records will show that no client of mine has ever filed a complaint with the SEC, FINRA, or any state regulator. And to the best of my knowledge, no client of mine has ever filed a complaint with any insurance or investment company. I think that track record speaks for itself. Peter has repeatedly said that I am "attacking and blaming the victim". And I have no doubt that Peter thinks anything I say to explain or defend myself is a personal attack on him. The simple act of denying portions of his complaint or trying to access the company records to show exactly why I recommended the variable annuity exchanges, is not an attack. It's an attempt to defend myself against what I believe is a wrongful accusation. But Dzoghi doesn't want to hear any of that. He thinks he is entitled to be the accuser, the judge, the jury, and the executioner, and that I should just keep quiet and let him speculate about why things happened as they did. And he obviously thinks that my clients who reacted to his one-star review and published reviews supporting me and my business, are attacking him too. He made a lot of noise about that. He also says Yelp, Google, Yahoo, and the Securities & Exchange Commission have treated him unjustly by requiring timely reviews and enforcing the statute of limitations. For some reason, he thinks the limitations should not apply to him. Peter seems convinced that I recommended the annuity exchanges just to make more commissions, and I deny that. And I don't think he realizes that it is possible that I was paid a reduced commission, or even no commission, on some of the transactions. Variable annuities are an investment product, so all applications and commissions went through the investment brokerage firm I was with at the time. For each variable annuity exchange, there were at least five parties involved. Myself, Peter Dzoghi, two insurance companies, and the brokerage firm. The Insurance companies and the brokerage firm all had certain suitability requirements regarding variable annuity exchanges, and they all had their own commission rules. (To avoid any confusion, it's important to note that while variable annuities are investment products, fixed and indexed annuities are not. Fixed and indexed annuities are insurance products that have no stock market risk.) The insurance companies and the brokerage firm both had their own commission rules regarding variable annuity exchanges, but that was 30 years ago, and I have none of those commission records. In fact, I haven't done business with any of those insurance companies for many years. I don't recall the commission rules that were in effect then, but today it is not uncommon for fixed annuity agents to have to refund 100% of the commission if an annuity is surrendered during the first 6 months after it was issued and 50% of the commission if it is surrendered between the 6th and 12th months after it was issued. I am sure I was well compensated for some of the transactions, but I don't know how much I might have had to refund when they were exchanged. However, I think it's safe to say that it is unlikely that I was paid full commissions on every transaction. But regardless of all that, I have never consciously let commissions influence my recommendations to clients. I don't know why I recommended the exchanges, and I believe that is the critical question. But Dzoghi has repeatedly said we don't need to know why. In his mind, there is no acceptable reason. Yet when I wrote that I had no records of the transactions and did not recall why I recommended the annuity exchanges, Dzoghi criticized me for not "guessing" why I recommended them. Of course, I knew he was just looking for something else he could nitpick about. He did the same thing when I mentioned the 10% federal penalty for early withdrawals from an annuity but didn't also mention the 2 1/2% California penalty. Even though I hold three of the most respected credentials in the industry and built my practice handling 401(k) rollovers and IRAs, he couldn't resist suggesting that I didn't know about the state penalty until he pointed it out. I am sure I could find a few hundred people who would confirm that I told them about both penalties long before I met Peter Dzoghi, but I have better things to do with my time. For my full response to Dzoghi's one-star review please scroll down to the last section of this page. OTHER CLIENT REVIEWS: Before it gets lost in this long response, I want to point out that after Peter Dzoghi posted his one-star reviews some of my clients decided to come to my defense by posting a review of their own. I believe it is safe to say that before then, most of them had never posted a review of any kind on the internet. And that must have really upset Peter because he spent a lot of time complaining about "suspicious" reviews. But there is no mystery about it. A few loyal clients chose to let readers know that their experience was totally different than Peter's, and he doesn't like it. Not all the reviews were published but I appreciate the effort that some of my clients made to support me and my business. Anyone who wants to read a few of those reviews should CLICK HERE. PERSONAL MESSAGE TO PETER DZOGHI: Peter, I believe all my clients have a right to complain if they have a valid reason. But I don't believe you have a valid reason, and the fact that you waited 20 years to post your one-star review and have never filed a complaint with any insurance company or regulatory agency should make anyone question your motives. I believe you deliberately let the statute of limitations expire so that you could make accusations without providing all the facts. And no matter what you think, or how you want to paint it, the facts are in the insurance company records. Not what you say, not what I say, not what some insurance company's customer service employee says, but what you and I can read on the actual company records. I don't know what those records will show, but whatever it is, that is what we should be looking at. Anything else is speculation and uncorroborated bull---t. You may have buyer's remorse and you may wish you had made different decisions, but there is no doubt that you received documents that described the transactions and disclosed all fees and surrender charges. And you received them for every one of the annuity replacements. I knew the attorneys that represented your family for many years, and based on my own experience with them, I believe they would have given you excellent advice about the annuity exchanges. And you had several years before the statute of limitations expired to file a formal complaint. If you had filed a complaint in a timely manner and had been able to convince the companies that your accusations were true, you might have been able to rescind the variable contracts and get all your money back. You had a lot of money invested in the variable annuities, and you claim that we had a falling out over the annuity exchanges, so I have to wonder why you didn't do something then. Wouldn't it have been worth a few dollars in legal fees? I know you claim to have been young and inexperienced, but as I recall, you were college educated, owned a home, had a large investment portfolio, and owned and operated a business with a studio in your backyard. The young and inexperienced excuse is a little thin Peter. You claim that you paid me some sort of consulting fee, but I have no idea what you are talking about. I suspect that you are referring to the money you put into the furniture business, but that was certainly not a fee. We all invested money in the business and all three of us were general partners. Your brother and the lawyers who represented you can confirm that. You have also said that I sold you a "variety" of investment products, including a limited partnership investment, but I have no recollection of selling you anything but variable annuities. And you have never specifically identified any investment product that you purchased from me, not even the variable annuities. What were those other investments, Peter? And what limited partnership did I sell you? If I am wrong, tell me what you bought. If you don't want to publish it on the internet or on your website, you can email it to [email protected] with a copy to anyone you like. I have no interest in exposing any of your confidential information and if you tell me what other investment or insurance products you bought from me, and I can confirm that with the product sponsor, I will publicly acknowledge that you were right. And I will not publish any of the details unless they conflict with your accusations. If you do publish it on your website, I am asking you to notify me by email to [email protected]. I don't have time to be perusing your website to see what you may have added, but if I owe you a public acknowledgement, I want to keep my word. But make no mistake about this Peter, if I ever gain access to documents that show you have deliberately made false accusations, and your contemptible website is still up and running, I will do all that I can to make you pay for that mistake. There will be no negotiating then. I have no secrets about any of this Peter. I am more than willing to let the records speak for themselves. Why wouldn't I? I am certain there is nothing in the records that will support your accusations. And if we were in court, I have no doubt the judge would dismiss your case for lack of evidence. Providing proof that you paid large surrender charges is not proof that you got "unsuitable" advice or that you were not aware of the surrender charges. And yes, "suitability" was the standard stockbrokers operated under in those days. About 30 years ago you probably had a chance to get all your money back. But even though you say we had a falling out about the annuity exchanges, you waited until the statute of limitations expired. Then you complained as though you were being persecuted by the statutes. I have no doubt that you understand exactly why we have (and need) statutes of limitation, and if you were accused of something that happened 30 years ago, you might be happy we have them. The statutes weren't designed to oppress you, Peter. They were designed to help all defendants have a fair chance to defend themselves while memories, records and witnesses still exist. You may think that their insistence on timely reviews deprives you of your right to free speech, but Yelp, Yahoo, Google (and the regulators) understand that your right to free speech should not override any defendants right to due process, justice, and a fair defense. The internet is a place where people are often convicted by reviews and accusations, without any real proof ever being presented, and I respect Yelp, Yahoo and Google for trying to keep things reasonably fair. But Peter, contrary to what you have suggested, I have no influence with any of them and I certainly didn't have the power to get your reviews removed. None of my clients or family did either. It's an amusing thought, but it didn't happen, and no sensible person will ever believe that it did. I don't know anyone who has that much influence over three companies like Yelp, Yahoo, and Google. And I don't think you do either. I know you used my name for your website so that it would appear when people searched for my name. I understand that, and I probably wouldn't have objected if you had used the website solely for the purpose of discussing your complaint about the variable annuities. But you are so determined to hurt my business that you can't resist making false or misleading comments about every product that you think I might ever recommend. It's a perfect example of throwing a lot of mud at the wall and hoping a little bit of it sticks. Almost all the stuff you have published is potentially more harmful to your readers than to me. I haven't sold a variable annuity for many years. I can't remember the last time I replaced an annuity. And although I am still in the investment advisory business, I stopped earning commissions as an investment broker several years ago. Peter, your one-star review has been a time-consuming nuisance, and my attorney, if given the chance, will find all kinds of reasons for me to be compensated for your assault on my business. But I want you to know that you waited too long to try to bankrupt me, Peter. My business will survive all the false accusations you can make. And my advisors seem to think that at some point I might be able to bankrupt you. So, feel free to accuse me of anything you can prove, but be careful, because contrary to what you seem to believe, the First Amendment doesn't guarantee you the right to print slanderous remarks or false accusations. And if my attorney ever sees an opportunity to take you down, your own website will be his best witness. I don't know how many people have read your one-star review, but I suspect most of them learned about it in one of my seminars or during their first meeting in my office. I believe in full disclosure, and I have probably done more to publicize your review than you have. It's just one of several routine disclosures that I make, and I don't spend more than a few seconds on it, but I do offer everyone the link to this website. And I am proud to tell people that in over 45 years the only customer complaint I have ever had is a one-star review by a former business partner who waited 20 years to claim that he didn't know he would be paying surrender charges on annuity exchanges he made about 30 years ago. I don't mind telling you that from the expressions on their faces, I think they have more questions about your thought process than about my ethics. THE UNRELATED PARTNERSHIP: I think it’s important for people to know that Peter Dzoghi is not just a former investment client. He is also a former partner of mine in a totally unrelated business. Peter and his older brother were my partners in a fiberglass furniture manufacturing business that did not work out. After a few years in business, it became increasingly clear that we could not comply with new hazardous materials regulations, and closing the business was the only prudent thing to do. I offered to sell my share of the business to Peter and his brother, but they refused, so I exercised my option to buy them out. The money I paid them was a total loss to me because I planned to close the business as soon as I gained total control. And that is exactly what I did. We all lost money in the furniture business but if I had to guess, I would say that Peter thinks that somehow, I made money by buying them out. I didn't, but I believe that may be the real reason Peter decided to complain about the annuities after so many years. He couldn’t complain about the furniture business because he followed his brother’s advice, and they were both represented by a very prominent law firm. So, instead of accepting responsibility for his own decisions and actions, I believe he decided to see if he could take revenge by attacking my financial services business. MY FULL RESPONSE TO DZOGHI'S REVIEW: About 30 years ago (1991 - 1992) I sold a few variable annuities to Peter Dzoghi. Peter was an investment client, and he (and his brother) were also partners of mine in a furniture manufacturing business. In what I admit was a very short time later, I recommended exchanging some of those annuities for other variable annuities. I don't recall Peter ever complaining to me about the annuity exchanges, and as far as I know, he has never filed a complaint with any insurance company or regulatory agency. However, around 2011 (about 20 years after he bought the variable annuities) he posted one-star reviews on Yelp, Yahoo, and Goggle. In those reviews he accused me of recommending variable annuity exchanges that were not in his best interest, and not disclosing the surrender charges. Yelp, Yahoo, and Google eventually rejected his reviews, so then he created a website (using my name) where he continues to deny knowing about the surrender charges and rants about things that have nothing to do with the variable annuity exchanges but are meant to interfere with my business. Since Peter had not been an investment client for many years, my records of his transactions were destroyed several years before he posted his first negative review on the internet. That means I have no way to identify the variable annuities he bought or to show why I made the recommendations to replace the annuities. The insurance companies might still have all the records, but Dzoghi has steadfastly refused to identify the companies and specific annuity contracts he is complaining about. I believe that is because he doesn't want me to gain access to the records and publish the facts. And of course, there is no guarantee that after all these years, the insurance companies can or will provide the records. Dzoghi has often said that variable annuities were not meant for trading, and I agree. But that doesn't mean there couldn't be a time or circumstance when it would make sense to replace them. My recommendations to replace the annuities had to make sense to Peter and to the insurance companies or the replacements would not have taken place. Insurance companies don't allow agents to replace annuities without good reason, especially when surrender charges are involved. And contrary to what he might like readers to believe, Peter Dzoghi did not rush into these transactions without understanding what he was doing. And those transactions could not have occurred unless Peter signed documents acknowledging that he had received disclosure of the fees, surrender charges, and other pertinent details. In fact, he has published documents that prove he received prospectuses that disclosed all that information. After being reminded of that, Dzoghi said he should not have been expected to read the prospectuses. But he is wrong about that. He was expected to read them, and he signed forms acknowledging that he received and understood them. But no matter what he says, in addition to providing a prospectus for every variable annuity I have sold, I have never sold an annuity of any kind without explaining surrender charges. Never! I have never made an investment recommendation that I didn’t believe was suitable and beneficial to the client. And I am sure that is one of the reasons I have never had a customer complaint filed with any company or regulatory agency. And it's also why Peter Dzoghi is the only person who has ever posted a negative review about me on the internet. He used a few different aliases, but it was always Peter Dzoghi. And for Peter to say that he completed 5 or 6 separate annuity exchanges at different times, and never once noticed that he was paying surrender charges, is incredible. These were evidently large annuities, and the surrender charges were substantial. A closing statement showing all fees and surrender values was provided for each annuity exchange, so it’s hard to imagine anyone overlooking the surrender charges on that many separate transactions. In addition to the closing statements that showed how much was distributed from each of the old annuities, the statements and contracts for the new annuities showed how much was received from the old annuities. That's at least two opportunities to see what was happening for each of the exchanges. Peter is not blind, and he is not stupid. He knew he was paying surrender charges. I told him, the prospectuses told him, and the annuity exchange documents told him. One might ask why Peter Dzoghi has never filed a complaint with any regulatory agency or accused any of the insurance companies of wrongdoing. And the answer is obvious. Peter knew that if he did, the insurance company records would be reviewed, and it would be determined that he signed documents indicating that he understood why the annuity exchanges were recommended and acknowledging that he was aware of the surrender charges and fees. On the other hand, Peter knows my records have been destroyed, so if he doesn't identify the companies and products he is complaining about, he can make accusations knowing I have no documents to prove him wrong. If he had filed an official complaint, he would have had to provide proof; but as it is, he can complain and even lie on the internet and never be required to provide proof. And he can hide behind aliases and anonymity as he has done from the beginning. Peter has admitted that he made profits from the variable annuities I recommended, and he has complained on the internet and his website about having to pay taxes on those profits. And he has also complained about having to pay federal and state tax penalties because he took withdrawals before age 59 1/2. But that's between him and the IRS. So far, he hasn't claimed that I told him the profits would be tax-free, and he was definitely informed of the state and federal tax penalties for withdrawals prior to age 59 1/2. Furthermore, I have never sold a variable annuity or any other tax-deferred product if I had any reason to believe the client would be taking withdrawals before age 59 1/2. After Yelp, Yahoo and Google kicked him off their sites, Peter created a website (using my name) to continue his fallacious accusations and to publish all kinds of false and misleading information about annuity and investment products that have nothing to do with his variable annuities complaint. His name is nowhere on that website, and although he denies it, he is using my name to spread misinformation and investment advice that could be especially harmful to older readers who need to choose products and services that will protect some or all the assets they will need for retirement. Instead of recognizing that we all don't have the same tolerance for risk and that many of us may not have enough time to recover investment losses, Dzoghi criticizes the more conservative financial products that guarantee safety of principal and can guarantee lifetime income. He doesn't understand that many retirees and conservative investors want (and need) some, or perhaps all, of their principal kept safe from stock market risks. In fact, he has naively said that with the (proper mix) of investment products no one will lose money over the long-term. By (proper mix) of investment products, Peter seems to mean exchange traded funds (ETFs) and history has shown that those funds can be at least as volatile (risky) as the markets themselves. Many investors have seen S&P500 index funds drop over 50% in less than 18 months. I don't know exactly what Dzoghi means by "long-term”, but I do know that many retirees don't have several years to recover investment losses. And if they need regular income from their investments, the last thing they want is for their investments to lose money. When you are drawing money out of a losing investment account, you can never fully recover investment losses, and you may run out of money long before you run out of time. There is a time and place for risky investment products, and there is a time and place for products such as annuities and insurance contracts that protect principal and provide guaranteed income. I recommend both investment products and guaranteed products and I know they are both useful, but for different purposes. And without knowing an individual's goals, resources, and tolerance for risk, I don't think any adviser (including myself and Peter Dzoghi) should be ruling any of them out. But Peter Dzoghi (and some of the very biased sources he likes to quote) have decided they know more about financial products (and are more honest) than all the academics and professional advisers who believe there is a time and place for low-risk financial products. If it weren't so dangerous to unsuspecting readers it would be a joke. I think Peter Dzoghi is a stubborn and vindictive person, but I have never thought he is stupid, and I don't think he believes everything he has published on his website. I don't think he really cares what products anyone uses, and he is obviously willing to publish anything he thinks will further his objective of costing me a few potential clients. It's really that simple. Peter Dzoghi wants to get even with me, and in his mind, that means he must attack every product or service that I might recommend. The only products he ever bought from me were variable annuities but as soon as I mentioned that I no longer sell variable annuities, he decided to target all annuities. And all insurance products. And all investment advisers who earn fees or commissions. And any adviser who may have a potential conflict of interest. Never mind the fact that all advisers who receive any form of compensation (even salary), have potential conflicts of interest. Dave Ramsey is one that Dzoghi has quoted several times, and Ramsey has so many money-making irons in the fire that he has more conflicts of interest than most advisers will ever have. Even my dentist has a conflict of interest if he recommends a treatment that he will be paid for. But none of that has anything to do with Dzoghi's complaint about surrender charges on variable annuity replacements. And his ranting about unrelated issues isn't because he thinks he has "a duty to inform the public". In my opinion, the public are just pawns in Dzoghi's game plan and he doesn't care that his writing might cause a few naïve readers to make some very bad investment decisions. I don't bother reading his website to see what he has added or deleted, but I do have copies of the investment advice and comments he has published in the past and if anyone is harmed by his advice, I will be happy to provide everything I have, if subpoenaed. CTT 06/21/2021 |
 C. Thomas Thames, CFP, CLU, ChFC
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