NU Online News Service, Jan. 26, 2004, 5:39 p.m. EST – Finetre Corp. says annuity transaction volume at its AnnuityNet online service increased 116% in 2003.[@@]
The Herndon, Va., company reports processing more than 357,000 annuity transactions last year, up from fewer than 165,000 transactions in 2002.
Much of the increase involved infusions of “new” money into annuities rather than transfers of funds from one annuity to another through 1035 forms, says Steve Dunlap, Finetre’s vice president of marketing.
“Last year, new money was 91% of our business, so 1035s were significantly lower than anyone had guessed,” Dunlap says.
Dunlap warns that Finetre’s success at attracting new money may not represent the industry average, given that Finetre does not yet have a critical mass in terms of the number of distributors using its technology.
“It’s too new a technology,” he says. “The number of 1035s is going down because many broker-dealers actively discourage their reps from doing 1035 business.”
The reason: broker-dealers are trying to avoid problems with regulators, who may see excessive annuity exchanges as an effort to generate commissions for the broker-dealer.