In the letters, Sen. Warren wrote, “I am concerned that these incentives present a conflict of interest for agents and financial advisers that could result in these agents providing inadequate advice about annuities to investors and selling products that may not meet the retirement investment needs of their buyers.”
In response to Sen. Warren’s claims, The Insured Retirement Institute (IRI) released the following statement:
Annuities are an important option for many consumers as part of their holistic retirement plans. These are the only offerings on the market that can provide tax-deferred retirement savings, upside growth with downside protection, and guaranteed income throughout one’s lifetime.
Annuities also come with a free-look period, in which new contract owners can terminate their contract without penalty. It also should be noted that IRI research shows nine in 10 annuity owners are satisfied with their annuity-based investment.
Almost all financial professionals who are IRI members hold both insurance and securities licenses and must adhere to a robust framework of consumer protections (at both the state and federal levels) that oversee the distribution of annuity products.
IRI and its members expect all financial professionals to meet the requirements of these laws and regulations – no exceptions. IRI supports FINRA’s annuity suitability rules and furthermore supports the uniform adoption, across all states, of the NAIC Annuity Suitability Model, the NAIC Annuity Disclosure Model and the NAIC Senior Designations Model. These rules all require sales practices that provide suitable financial products given an investor’s individual needs.
These rules, combined with other mandated education and oversight requirements, foster a best practice environment for financial professionals.
A PDF copy of the letters is available
here. Examples of the kinds of incentives companies offer to annuities brokers and dealers are available
Don’t miss crucial news and insights you need to make informed investment advisory decisions. Join ThinkAdvisor.com now!
Free unlimited access to ThinkAdvisor.com which provides advisors, like you, with comprehensive coverage of the products, services and trends necessary to guide your clients in making critical wealth, health and life decisions.
Exclusive discounts on ALM and ThinkAdvisor events.
Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.