Displaying items by tag: annuities

(Washington)

While it has largely gone unnoticed by the wealth management media, New York state has just enacted a new best interest rule for annuities. As of August 1st, advisors must now consider the best interests of clients before selling annuities. Additionally, annuities sellers cannot call themselves advisors unless they are licensed to do so. The rule came about to try to fill a gap after the defeat of the DOL’s fiduciary rule last year. New York follows Connecticut and Nevada in making their own best interest rules governing certain products.

FINSUM: Annuities have been cleaning up their act in the last few years, and this will be another step in the process. Best interest rules notwithstanding, we do think the improving business climate for annuities is a good thing because they make sense for many clients.

(New York)

Annuities are an important part of both advisors’ businesses and their clients’ portfolios. However, the options in the market can be overwhelming, especially if you are an advisor new to the asset class. The annuities business has cleaned up its act in the last few years and is finally getting some respect because of its ability to alleviate retirees’ worst fears—running out of money in retirement. Well, Barron’s has put out a list of the top 100 annuities in the market, including how to pick them. The list is quite extensive, so here is a link. The choices are broken down into numerous categories and include offerings from Lincoln National Life, Transamerica, Prudential, CUNA Mutual Group, and beyond.

FINSUM: Not only do annuities help alleviate the fear of running out of money for retirees, but they are also popular with Millennials, who are financially conservative and have a similar concern about future income.

(New York)

Life insurance and annuities have always been a strange grey area for RIAs. They tend to be quite high commission products, a fact which obviously does not blend well with the no-commission, fiduciary mandate. This has left RIAs in an odd position. However, a new and quick growing company, DPL Financial, is now offering a solution. The company serves as an insurance network helping RIAs utilize products from the space. It works with providers of insurance products to help them tailor their offering for RIAs, such as making products commission-free. DPL has already signed up 200 RIAs to use its service. In an example of what they do, DPL’s founder and CEO, David Lau, commented on signing up Jackson National Life Insurance recently, saying “Jackson has long been a market leader in variable annuities, and we are excited to be their partner in launching their fee-based products to the independent RIA market”.

FINSUM: This seems like a very smart and useful approach and the utility for RIAs appears clear. It is obvious they are solving a big problem given their pace of growth.

(New York)

A year ago, annuities looked like a product that had outlived its regulatory life cycle. The pending DOL fiduciary rule seemed completely incompatible with the product and its selling practices, so annuities appeared likely to take a big hit. Then the rule got shot down in court, and the whole picture changed. Data is now in on 2018 annuity sales and it looks strong—sales smashed all previous records. In virtually every category of annuities, sales were up considerably, in many case 20% or more.

FINSUM: The annuity sales outlook has completely changed. The next five years—as the number of people 65 or older hits 60 million—looks to be very strong.

(Washington)

The fiduciary rule is starting to throw its weight around despite the fact that it is only half-implemented and very much on the regulatory rocks. Massachusetts is currently going after Scottrade under the rule, and now Barron’s says there will be another victim—annuity sales. The asset class saw its total sales fall 8% in 2017 to $203.5 bn, and those figures are expected to fall further this year unless the fiduciary rule is reversed. “The impact to IRA annuity sales was much more pronounced than nonqualified annuity sales”, says an industry expert.

FINSUM: This is a huge market that is being eroded by the rule. Hopefully the SEC and DOL come in with a new rule this summer.