Investor Alert: Variable Annuity Sales Increase in 2018
According to an article in Investment News today, independent broker-dealers saw a rise in sales of variable annuities last year, with 39% of overall VA sales in 2018.
Independent broker-dealers sold $39.4 billion of variable annuities in 2018, an increase of $3.7 billion or 11%, according to the Limra Secure Retirement Institute.
According to the article, the increase is attributed to several factors including more attractive product features, an increase demand of structured or buffer annuities, and the demise of the DOL’s fiduciary rule.
The full-service national broker-dealers, including wirehouses were reportedly unchanged in VA sales at $12.2 billion.
Structured annuities, which are considered by the industry to be a variable product, accounted for $1.7 billion of VA growth last year. These may not be as popular with the wirehouses since their brokers have alternative products such as structured notes available to them, according to the article.
Indexed annuities, which used to have a reputation for high commissions and high surrender charges, also increased in 2018, according to Investment News. The products have reportedly become more acceptable from a client view point.
Variable annuities, while appropriate for some investors in the appropriate amounts, can be unsuitable for certain investors, such as retired investors concerned with present income for expenses.
Due to the high commissions that financial advisors make in recommending variable annuities, the improper sale of variable annuities is one of the most common types of securities frauds. Financial advisors may recommend these products to investors that do not need the tax and death benefits offered by such products.
If you have questions about a variable annuity sold to you, The White Law Group may be able to help. For a free consultation with a securities fraud attorneys, please contact our offices at 888-637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Vero Beach, Florida. For more information on The White Law Group, please visit the firm’s website at https://www.whitesecuritieslaw.com.