Variable annuity sales have been hammered this year. A new report from Cerulli Associates projects that sales will continue to fall at an annualized rate of 10% through 2017 and 2018. The decline in sales results from a new rule from the Department of Labor that regulates conflicts of interest. Variable annuities don’t belong in most portfolios to begin with. The DOL Fiduciary Rule is a little late to the party. John Sullivan reports for 401kSpecialist Magazine: Calling it the “primary issue facing the VA industry is the DOL Conflict of Interest Rule,” Cerulli notes the rule extends … [Read more...]
New Wave of Annuities Likely to Fall Short of Investor Expectations
I've been warning investors about the perils of buying variable annuities for a long time (read: here, here, here and here). Now Investment News has reported that variable annuity sales are headed for their lowest year in nearly two decades. That's the good news, but I am concerned about the continued increase in indexed annuities which are likely to fall short of investor expectations. More from Investment News here: As independent broker-dealers have pulled back from variable annuities, they've embraced indexed annuities, according to Mr. Geising, who said sales grew 60% in the IBD channel … [Read more...]