CANNEX Financial Exchanges Ltd. provides some of the information rivers that make the U.S. annuity industry work.
Ten years ago, the Toronto-based company was known for its single-premium immediate annuity exchange.
Over the years, the company has broadened its scope. It now offers data streams that can help annuity makers, distributors, buyers and others understand the prices, features, and benefits-adjusted value of a wide variety of retirement savings and retirement income products.
(Related: 3 Must-Ask Questions for Annuity Clients)
Gary Baker, the president of the CANNEX USA unit, and Tamiko Toland, the unit’s head of annuity research, came to ThinkAdvisor’s offices recently to talk about what they’re seeing from their position as annuity information river managers.
Here are five insights they shared during the interview.
1. The annuity distribution pipes have shrunk.
The number of client-facing advisors is smaller than it was 10 years ago, and so is the number of advisor-facing distributors, Baker said.
“There’s a much smaller group of wholesalers,” Baker said. “And the role of the wholesaler has changed.”
The advisors still selling annuities have less time to have general conversations about annuities, he said.
The wholesalers still in the market are maintaining their connections with the retail advisors by providing more support and market intelligence, Baker said.
Baker said he thinks the decline began years before the U.S. Department of Labor’s fiduciary rule project took off, in the wake of the Great Recession.
2. The thinking behind the DOL fiduciary rule is probably here to stay.
The department has put off applying key implementation guidelines for at least 18 months, but it let the “best interest” standard, or the idea that a retirement advisor should put the client’s interests first, take effect June 9.