March 2016 – Future Allocations and Contributions for Variable Annuities

Clients using their variable annuities as a retirement investment vehicle should be able to contribute funding and direct allocations of future funding online. Being able to conduct these transactions digitally saves clients time and is far more convenient than filling out physical forms or calling the firm to make changes. Trade-savvy investors who are used to conducting transactions online will be frustrated to find the process is not as seamless for their annuities. Firms can facilitate the process for less educated investors by offering help resources and investment fund educational details within an intuitive interface. This Annuity Monitor Report examines two different transactional capabilities—annuity contributions and future fund allocations—on the private sites of 12 firms in our coverage group.

Proactive investors looking for ways to increase their retirement income should be able to do so seamlessly. All of the firms covered in this report offer clients a future fund allocation transaction while only two firms allow clients to contribute to their variable annuity online. Since Annuity Monitor last analyzed this topic in 2013, no firms have added the ability to add contributions to a variable annuity online. This is surprising as we had hoped to see more offerings in this arena even three years ago. As clients can easily purchase ETFs and conduct other financial transactions online from some of the same firms analyzed in this report, it is egregious that more firms do not offer contribution capabilities for their variable annuity products. Even though none of the future fund allocation capabilities have drastically changed since 2013, firms still succeed in allowing clients to alter their future fund allocations, with all firms providing easy access and about half of the firms facilitating the process with progress meters and a help or frequently asked questions link. More firms ought to include options for clients to conduct investment research when selecting their variable annuities, and we continue to hope that more firms will add a contributions capability.