Stan The Annuity Man®‘s Top Ten Annuity Predictions
Inevitable industry changes – Driven by the DOL ruling:
1: All annuity sales will decrease in the short term.
2: Independent agents become an endangered species.
3: Only a few Field Marketing Organizations will survive.
4: Product selection greatly reduced.
5: Commissions will go down, perhaps even to at rates.
Within 5 Years – The next wave of changes will be consumer-driven:
6: Direct to consumer annuity sales platforms ourish.
7: Future annuity products dictated by and designed for consumers – not for agents.
8: Annuities become simple and easy to understand.
9: QLACs go from 1% of all sales to the #1 product.
10: Annuity Sales surpass $1 Trillion per year.
InsuranceNewsNet.com: FIA Sales Tumble 14% in Q1
Stanalysis: High commission products such as fixed and variable annuities sometimes get priority in the sales process when often a lower commission product like a DIA, a QLAC, SPIA or MYGA would meet the client’s needs. Many industry experts cite that the Department of Labor Fiduciary Rule as the reason Fixed Annuity and Variable Annuity sales are down. The annuity industry is missing the message because agents are driving the agenda. If clients were driving the agenda, sales would be on the rise. Eventually the annuities industry will be driven by the consumer.
Stanalysis: With so many pension plans in the red, the only person you can truly depend on in your retirement is YOU! Annuities are so misunderstood, largely because they have been incorrectly sold to Americans for years. But annuities can be a self-funded pension plan by providing guaranteed income in retirement.
Motley Fool: 4 Proven Ways to Boost Your Retirement Income
Stanalysis: Why do people continue to recommend stocks and bonds as guaranteed income in retirement yet don’t consider Single Premium Immediate Annuities, Qualified Longevity Annuity Contracts or Deferred Annuities that offer guaranteed income? Don’t be an annuity hater. SPIAs, QLACs and DIAs offer contractual guarantees of income in retirement.
Investment News: Some firms opting to sell fixed annuities under best-interest contract exemption to keep trips, bonuses intact
Stanalysis: I have been warning consumers about pushy sales tactics for years. The problem is that under the DOL new fiduciary rules, Fixed Indexed Annuities will fall under the more onerous BICE – Best Interest Contract Exemption – which on the surface seems like a good thing. But unfortunately it also allows for certain compensation arrangements to remain intact. I would like to think putting these products under BICE rules would make it better for consumers. But unfortunately if you leave compensation arrangements in place, agents can still be motivated by the wrong thing.
Stanalysis: In my opinion this is move by the states for more regulations is “army eyewash”…..meaning that it looks good on the surface, but will probably have no meaningful change to the abhorrent sales practices and advertising that permeates the annuity industry. What will probably come out of it is more forms for the client and agent to sign. No real change.
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