Will RIAs Start Using Fixed Rate Annuities in Portfolios?
March 25, 2024 by David Blanchett
The notable rise in bond yields starting in 2022 has changed the investment landscape, especially for fixed income-related strategies. In addition, taxes have become more important, increasing the importance of asset location.
Annuities are relatively underused by investment advisors, whether they are viewed more from an investment-related lens or as a product that provides protected lifetime income. A rise in fee-friendly products, though, may lead to higher adoption by investment advisors.
Click HERE to read the full story via Think Advisor
Wink’s Moore on the Market: I appreciate my friend David Blanchett, for trying to raise awareness of annuities amongst the advisory community.
Just a heads-up:
There are fixed annuities that only guarantee their rate for one year. These products’ sales are included in the fixed annuity line of business for LIMRA.
Wink, Inc. isolates MYGA sales, which reached $153.9 billion for 2023. This was a 48.3% increase over 2022!
Also, for what it’s worth, the average commission paid on MYGAs is 1.91% as of 4Q2023.
There are 32 different fee-based MYGAs available for sale today. The eight different insurance companies that offer them have surrender charge periods ranging from 0 to 10 years. The credited rate on these products ranges from 3.75% to 6.25%.
It’s a great time to be selling MYGAs, regardless of how you are paid! -sjm
