Fixed Annuities through RIA

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B24's picture
B24
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Joined: 2008-07-08

This may be a dumb question, but if you recommend a fixed annuity, and work as an RIA only, do you need your insurance license?  I know you do when you are buying commission-based annuities through a B/D, but wasn't sure how RIA firms worked.  I am guessing the answer is yes, but I just wanted to ask.

joelv72's picture
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Joined: 2008-11-28

B24 wrote:This may be a dumb question, but if you recommend a fixed annuity, and work as an RIA only, do you need your insurance license?  I know you do when you are buying commission-based annuities through a B/D, but wasn't sure how RIA firms worked.  I am guessing the answer is yes, but I just wanted to ask.
I had this question as well.  I am assuming since it is an insurance contract, you must be licensed and have some sort of agreement with the insurance co.  I'm also assuming it works the same way with VAs.  Any insight from others on the board would be helpful.

deekay's picture
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Joined: 2007-05-15

I don't know of no-load fixed annuities, but I know there are a lot of no-load VAs and life insurance for the RIA.  Generally they suck hind teet.  Why?  Because there's no market for them.  Insurance companies know where their bread's buttered - commision-based insurance agents.  Most RIAs I know of do what Ice mentioned - refer out the insurance work or do it themselves for a commission.

joelv72's picture
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Joined: 2008-11-28

deekay wrote:I don't know of no-load fixed annuities, but I know there are a lot of no-load VAs and life insurance for the RIA.  Generally they suck hind teet.  Why?  Because there's no market for them.  Insurance companies know where their bread's buttered - commision-based insurance agents.  Most RIAs I know of do what Ice mentioned - refer out the insurance work or do it themselves for a commission.
The no-load VAs were of interest to me.  I didn't think you needed to affiliate with a BD for those since no commission is involved.  Don't plan on doing a ton of this business, but I have a couple of clients that could benefit (i.e. one young Orthopedic Surgeon comes to mind).

5more's picture
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Joined: 2008-08-25

every fixed i do has no load taken of the clients investment...if one does that ...run , same with a good VA...100K in is 100K...there are no fees on a good fixed annuity, but the ones i use now are only yielding 3.15%(4% first year bonus) for 5 years, no tax ( deferred) no fees, no comm. deduction yet i get 3 % straight comp.better then a CD for conservative inv 55 or above   

TickTock's picture
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Joined: 2010-01-15

What are the current decent Fixed annuities? I have not seen anything better than 3% for five years? NY Life is down to a 6 yr product, with a 3 year guarantee of about 2.6% and then a reset in the 4th year hoping for better rates. 

staff writer's picture
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Joined: 2007-07-16
dp2011's picture
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Joined: 2011-04-22

iceco1d wrote:You need the insurance license to sell any type of annuity.  You have to affiliate with a b/d and keep your 7 active for VAs.  You can sell fixed annuities with just an insurance license, but how you justify that to regulators and maintain no conflicts of interest (i.e. a commission) is another issue - maybe someone like Fred can answer that.I know of some RIAs on this board that just refer all insurance biz out (and then get referrals back from life guys for investments, etc.).If anyone is reading this from product design, the insurance companies need to come out with "no load fixed annuities."  No commissions paid, RIAs can charge their AUM fee on it just like they do on stocks or bonds.  You'll capture a shat ton of assets, but to my knowledge, no load fixed annuities don't yet exist.______________________I know the American General Group Annuity Division 800-538-6381 retirementannuities@americangeneral.com offers annuities to be sold by RIAs at low or no comp. They have fixed deferred, indexed, SPIAs, and Delayed Income Annuities (longevity) with comp that is completly adjustable all the way down to zero/no load.

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