United States Senator Elizabeth Warren sent letters to 15 of the country’s largest annuity providers today. In those letters, the Senator questioned rewards and incentives and cited “the need for a strong conflict-of-interest rule for retirement advisors.”
The letters were sent to the 15 companies with the highest 2014 U.S. individual annuity sales: Jackson National Life, AIG Companies, Lincoln Financial Group, Allianz Life, TIAA-CREF, New York Life, Prudential Annuities, Transamerica, AXA USA, MetLife, Nationwide, Pacific Life, Forethought Annuity, RiverSource Life Insurance, and Security Benefit Life.
The letter explains that “annuity providers offer a vast range of perks – from cruises to international travel to iPads to diamond-encrusted ‘NFL Super Bowl Style’ rings to cash and stock options – to entice sales of their products.”
“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,” Senator Warren wrote.
Of particular concern to the Senator is “the impact on individuals who are on the verge of retirement because they have little time or ability to recover potential losses from bad investments.”