Industry leaders say advisers and consumers want simpler, cheaper annuities
The financial services industry is planning to launch a broad array of guaranteed-income products as demand for these investment options increases, according to executives at InvestmentNews’ Retirement Income Summit in Chicago.
Robert DeChellis, president and chief executive of Allianz Life Financial Services LLC, said last week that Allianz Life Insurance Company of North America has filed a registration statement for a variable annuity it plans to launch this year, the Allianz Retirement Pro Variable Annuity. The product is designed for the dually registered fee-based investment adviser.
During a panel discussion between Mr. DeChellis and Christopher Blunt, executive vice president of retirement income security at New York Life Insurance Co., both executives said the industry is responding to feedback from consumers and advisers that annuity products need to achieve their purpose of providing lifetime income. They also need to be simpler, and with lower fees.
Some advisers and customers still don’t completely understand annuities, they agreed, but at their core, annuities are simple instruments and should be considered another asset class or security.
In the future, Mr. Blunt said, “you’ll see simplicity by design” in the annuities industry, because “at the end of the day, you have to be able to explain it.”
He added that when annuities become “more about the guaranty and less about the legal structure of being an annuity, the market will expand.”