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 fiduciary protection to all retirement accounts, including individual retirement accounts (IRAs), and requires point-of-sale disclosure of an advisor’s conflicts of interest.
Its findings are in line with Ignites Research, which also expects advisors to to scale back their use of variable annuities, “most of which sell on a commission basis and therefore represent potential conflicts of interest under the new regulations.”
E.J. Smith - Your Survival Guy
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