American Express Unit Pays $350,000 NASD Fine

American Express Financial Advisors, the financial planning arm of American Express(AXP Quote), is paying a $350,000 fine to settle allegations that its employees used improper sales practices in peddling variable annuities and life-insurance policies.

The NASD, formerly the National Association of Securities Dealers, fined and censured American Express for violations that occurred over a 30-month period ending in 2000. Regulators contend that the firm's employees "did not adequately explain" to customers the benefits or limitations of a variable annuity and how it differs from an investment in a mutual fund.

A variable annuity, a financial instrument that makes periodic payments to a customer during his or her lifetime, is one of the life-insurance industry's staple products. One downside of variable annuities is that they sometimes include high fees and commissions for the brokers that are selling them. ...