WHEN Elaine and Merlin Toffel, a retired couple in their 70s, needed help with their investments, they went to their local U.S. Bank branch. The tellers knew them by their first names. They were comfortable there.

So when a teller suggested that they meet with the bank’s investment brokers, the Toffels made an appointment. After discussions and an evaluation, the bank sold them variable annuities, in which they invested more than $650,000. The annuities promised to generate lifetime income payments.

“We wanted to make the most amount of interest we could so if we needed it to live on, we could use it,” said Ms. Toffel, 74, of Lindenhurst, Ill.

What she says they didn’t fully understand was that the variable annuities came with a hefty annual charge: about 4 percent of the amount invested. That’s more than $26,000, annually — enough to buy a new Honda sedan every year. What’s more, if they needed to tap the money right away, there would be a 7 percent surrender charge, or more than $45,000.

Ragy Thomas, founder and chief executive of New York-based startup Sprinklr Inc., which helps brands manage their social-media presence, recently raised a round of venture funding that valued his company at more than $500 million. In the past, a firm like his would be charting an IPO path, but he has no such plans. “I don’t want to deal with roadshows and compliance and regulatory stuff, and all the other overhead [of being a public company],” he said.