How to Decide if an Annuity Is Right for Your Client: Morningstar’s Benz
July 1, 2020 by Ginger Szala
Annuities have grown in popularity, largely due to their promise of a guaranteed income stream until a client’s death. They can help investors strengthen retirement plans, defer taxes and some can protect against stock market losses, but there are caveats, says Christine Benz, Morningstar’s director of personal finance.
The questions advisors must answer: Is an annuity right for a client? If so, what kind?
In her first of a series looking at how to evaluate annuities, Benz provides an overview of how to answer these questions.
Advisors and clients first must understand the wide variations in types of annuities. Some are simple fixed annuities while others, she says, are complex, and have “opacity of fees, high commissions and advisor incentives” that can make it difficult for clients to evaluate.
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