Is Waddell & Reed an honest investment company?

Waddell & Reed agreed to pay $50 million in restitution for illegal trading. Just wondering if they are honest. Also, are mutual funds a better investment than annuities for retirement? Thanks

waddle's name with me is good however I wish I could discust some of their " Virtual Goods " investments and try and get them to put more money in companys that build things like construction, steel and the automobile industry.

Do not know about honest but they employ some really shabby managers look at this article on thomas mengel who runs their intl fund...

Slow boat
"This fund is a complete disaster," says Annie Sorich, a fund analyst at Morningstar, which gives Ivy International Growth a rating of one star and includes the fund on its list of "analyst pans."
"They have continued to lag the category," she added, "and they only looked good because there has been a bull market in foreign large-cap stocks. ... That has some people thinking this fund is doing okay; you wouldn't be aware of how badly this fund is doing if you don't compare it to others."
Ivy International Growth is not going to send its shareholders to the poor house. Over the past five years, the fund is up an average of 11.4% per year. It gained about 23% last year, its fourth consecutive year of double-digit gains.
That seems great, until you recognize that the five-year returns put the fund in the bottom 10% of its peer group, according to Morningstar. It's that deep on the 10-year return list too, and is far below average, even in the shorter time periods.
Where the fund is above average is in the level of risk it takes. The one-star rating reflects the fact that the Chicago research firm believes the fund is not providing an appropriate return for its given level of risk.
Lipper Inc. gives the fund middle of the pack scores for total return, consistent return and preservation of capital, but scores it lower on costs.
Sorich figures that investors are sticking with the fund because they paid a sales load and don't want to pay another to reinvest elsewhere, or because they have long-term capital gains that they don't want to pay taxes on.
While those common excuses for staying in a fund make sense, they fall apart in the case of Ivy International Growth because the fund has not been particularly tax efficient. With much of its total return coming from capital gains distributions, the truth is that investors who own this fund in a taxable account already have paid a lot of the taxes that would be due.
Accordingly, their gains from a sale are likely to be smaller than expected. And while investors need to be careful about paying sales charges, a superior fund can quickly overcome its up-front cost.
What's more, an investment adviser worth their fees would be hard-pressed to come up with any real reason to stick with Ivy International Growth.
In short, an investor is left with some reasons to hang on to this fund, albeit reluctantly. What they don't have is any compelling reason to buy, and that's never a good sign.
"There's nothing really good that you can say about the fund, and that's a problem all by itself," Sorich said. "This fund has only looked good when you don't compare it to its peers, and because it has been in the right area of the market. It won't always be the case that foreign large-cap has double-digit gains, and when things there look bad, this fund will look really ugly. ... That should be obvious to people who have been in this fund for awhile; there's no reason that's good enough to hang on."
Chuck Jaffe is a senior MarketWatch columnist. His