New fee-based annuities have been released in rapid succession by four of Corporate Insight’s Annuity Monitor firms in the first two months of the year. After not offering any new products in the fourth quarter of 2016, firms in our coverage group have launched nine new annuity products so far in 2017. Of these, five are fee-based variable annuities and a sixth is a fee-based fixed index annuity.
New Fee-Based Annuity Products
Advisors selling fee-based annuities do not earn commissions on the products, a practice that consumer advocates say better aligns with clients’ best interests. Firms are increasingly expanding their product shelves to offer these products, in part to accommodate advisors who wish to meet fiduciary standards. When announcing their new products, Allianz and Transamerica cited market demand as a motivating factor, noting that advisors have increasingly requested fee-based products. Lincoln promoted its three new annuities as a remedy for a previously limited selection of fee-based products and affirmed that it will continue to serve both commission- and fee-based advisors. Notably, Jackson cited the DOL fiduciary rule as a source of market demand for fee-based products. While a presidential memorandum after Jackson’s product launch has called the future of the rule into question, the firm’s discussion of its results is still relevant as the industry is expected to continue moving toward fee-based business models.
Below is an overview of the new products in order of launch date:
- Transamerica I-Share – Includes six optional riders and no surrender charges. A product summary available from the product page lists features such as investment and withdrawal options in a table.
- Lincoln ChoicePlus Advisory – Offers six living benefit riders, joining the existing ChoicePlus variable annuity product suite. For this and the following two Lincoln products, the firm’s product pages provide performance information and the full prospectus.
- Lincoln American Legacy Advisory – Joins the American Legacy series of variable annuities, which is designed to offer customized investment strategies.
- Lincoln Investor Advantage Advisory – Aims to minimize tax exposure for retirement income as part of the Investor Advantage series of variable annuities.
- Jackson Elite Access Advisory – Designed to manage risk tolerance with features that are nearly identical to the Elite Access variable annuity. The product page includes brochures and other resources for prospects, including a fact sheet that summarizes features such as a three-year withdrawal charge schedule and the option to trade up to 15 times each year.
- Allianz Retirement Foundation ADV – Offers growth potential and includes the Income Benefit rider. Allianz previously published a brochure with product details but has since removed it from the public site.
These six fee-based annuities represent a strong start to new products in 2017. For an overview of annuity products launched in 2016, please read our Q1, Q2 and Q3 & Q4 Product Updates. Two blog posts summarize firms’ responses before and after the DOL fiduciary rule was finalized in 2016.