Another DOL Fallout: Annuity Sales
March 7, 2018 by Cheryl Winokur Munk
It’s not a fun time to be peddling annuities—especially in retirement plans.
Annuity sales in 2017 were $203.5 billion, down 8% from the year-earlier period, according to a report from the LIMRA Secure Retirement Institute. Industry watchers attribute a good portion of this drop to the DOL’s fiduciary rule, which has been putting a damper on annuity sales since the rule was issued in April 2016.
“The implementation of the DOL fiduciary rule in 2017 had a significant impact on the individual annuity market,” says Todd Giesing, director of annuity research at LIMRA Secure Retirement Institute, in a statement on Wednesday. “The impact to IRA annuity sales was much more pronounced than nonqualified annuity sales.”
Annuity sales into IRAs were down 13% in 2017; by contrast, sales in non-qualified taxable accounts — which weren’t directly affected by the fiduciary rule — dropped only 1%, InvestmentNews says, citing LIMRA data.
Giesing tells InvestmentNews that he expects sales to be flat or up only marginally in 2018. Sales are likely to remain under pressure due to the uncertain fate of the DOL rule and a possible move by the SEC to introduce its own fiduciary rule. Another pressure is coming from the state level, as certain states have stepped up to implement their own fiduciary regulations.
“Nobody knows at the end of the day what their new world is going to look like, and that’s created some tentativeness out there in terms of use of annuities,” Giesing tells the publication.
— Cheryl Winokur Munk
