As fiduciary rule sunsets, certain annuities gain favor with boomers
April 9, 2019 by Donald Jay Korn
After weathering a turbulent three years, variable and fixed index annuities with guaranteed lifetime withdrawal benefits have gained traction — for now.
Retail sales of these riders in VAs and FIAs fell by more than 42% from the third quarter of 2014 to the third quarter of 2017, in part because many advisors didn’t know how the imposition of a federal fiduciary rule would affect GLWBs, according to Teddy Panaitisor, research analyst at LIMRA Secure Retirement Institute.
“The primary reasons were record low interest rates, which affected payouts, and uncertainty about the impact of regulatory issues,” Panaitisor says.
What a difference a year makes. By the fourth quarter of 2018, regulatory prospects had clarified somewhat and similar sales had rebounded by 24%. Interest rates and yields to investors also moved northward.
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