The variable annuity industry should help workers prepare for retirement by changing the way it promotes variable annuities.[@@]

Charles Haldeman Jr. delivered that message here at the annual meeting of the National Association for Variable Annuities, Reston, Va.

Haldeman, president of Putnam Investments, Boston, was one of several NAVA meeting speakers who talked about the need to do the right thing and put investors first.

“Too often,” Haldeman said, “we have put the interest of selling funds ahead of the obligation to make sure the investor is better for the long term.”

One way for the industry to improve is to stop advertising high rates of return in a short time range and in narrow asset classes, Haldeman said.

Instead, Haldeman said, the VA industry must adopt strategies that will encourage investors who are saving for retirement to buy and hold diverse portfolios of investments.

Haldeman argued that baby boomers face 2 main retirement investment challenges: A low propensity to save and a general failure to invest properly.

Figures from the Investment Company Institute, Washington, show that 38% of retirement plan participants ages 20 to 30 have no exposure to stocks whatsoever, while about 50% of retirement plan participants ages 50 to 60 have either 0% or 100% of their assets in stocks and stock funds, Haldeman said.

Other investors move money from fund to fund too often, and the VA industry can ease that problem by providing consistent and dependable returns, Haldeman said.

Another NAVA meeting speaker, Glenn Schafer, vice chairman of Pacific Life Insurance Company, Newport Beach, Calif., said the VA industry must do the right thing by educating consumers about valuable VA attributes such as VA death benefits and VA principal guarantee features.

But the industry also has to put limits on commissions and on maximum surrender charges, Schafer said.

Actions to limit commissions and surrender charges “are not going to kill anyone,” Schafer said.