If Brokers Drop Commission-Paying Annuities, This May Be Big Issue
August 31, 2021 by Warren S. Hersch
Wink CEO Sheryl Moore identified a big lack of product choices. There are, she noted, just 98 fee-based deferred annuities from 34 companies.
She added that, as of the first quarter of this year, only 2.28% of the $58.1 billion in deferred annuity sales was attributable to fee-based products.
“Insurance companies are not going to exert any effort on product development of fee-based annuities, if they are not able to realize sales from them,” she said in an email.
But she’s also skeptical that banks and broker-dealers would readily switch to fee-based annuities in the first place.
“I would speculate that the potential compensation that they would receive from fee-based sales of annuities would be significantly less than what they earn today,” she said. “For that reason, I think this is a huge improbability.”