June is Annuity Awareness Month, a time for savers to focus on the only financial product in the marketplace that offers guaranteed lifetime income. When Americans are planning for their retirement, they can rest assured that financial professionals put the best interest of consumers first when considering annuities.
Annuity sales are regulated at both the state and federal level. Nearly 4/5 of the United States have adopted the enhanced consumer protections in the National Association of Insurance Commissioners (NAIC) updated model regulation on annuity transactions, and many additional states are considering similar measures to further protect their citizens. These actions in the states closely align with the Securities and Exchange Commission’s Regulation Best Interest.
These harmonized measures require consumers’ best interest be reflected in annuity sales recommendations.
To ensure transparency, honesty and clarity are present in interactions with consumers, financial professionals have:
With all these measures working together, consumers can be confident that the financial professional is working in the consumer’s best interest. But unlike a fiduciary-only approach, these measures ensure all savers can still access information about different choices for long-term security throughout retirement. This is particularly important for financially vulnerable lower- and middle-income Americans without the means to engage a fiduciary adviser. A new survey shows that retirement savers overwhelmingly want the option to work with any type of financial professional who is offering products and services that meet their needs.
The value of the stable, guaranteed income from annuities has been reaffirmed in recent years. Annuity sales set a record in 2022 and are on pace to exceed that mark this year.
Consumers throughout the United States looking to achieve financial security and prosperity throughout retirement are in a stronger position than ever, thanks to the robust state and federal protections surrounding annuity sales.
(To learn more about annuities, join ACLI’s Twitter chat on Monday, June 26, from 1-2 p.m. ET.)
Jillian Froment is Executive Vice President and General Counsel at the American Council of Life Insurers (ACLI). She is responsible for merging and optimizing general counsel and policy development into ACLI strategy that supports the life insurance industry, our members and the consumers and communities they serve.
