DOL Final Rule Change Could Hurt FIA Sales
April 6, 2016 by John Hilton
While the final fiduciary rule contains plenty of concessions by the Department of Labor, one significant change is expected to hurt fixed indexed annuity sales.
The DOL opted to toughen the rule by adding FIAs to the Best Interest Contract Exemption, along with variable annuities.
‘While this had been discussed at various times, we most recently heard from industry players that it wasn’t expected,” said analyst Keefe, Bruyette and Woods in a note on the rule this morning.
Indexed annuities are a high-commission product like VAs, and 60-65 percent of industry sales are within qualified retirement plans, KBW said.
“We expect indexed annuity sales to be negatively impacted as result,” the analyst added.
The DOL fully explains the changes in this fact sheet.
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