Any financial advisor who sells an annuity and receives compensation for that sale is going to be acting as a licensed agent on behalf of the company whose product they are selling.
This financial advisor may be involved in activities that range beyond annuity sales such as fee-based investment advising, but they will be acting as an agent when they sell the annuity.
The significance is that an agent has a legal, contractual obligation to represent the interests of the principal. In the case of annuity sales, the principal is the insurance company.
The principal-agent relationship is not necessarily a bad thing. In fact, it serves multiple purposes—not the least of which involves the ability of an insurance company to essentially outsource its sales activities without assuming limitless liability.
What is important is to remember to think about the incentives that may impact the information you receive when speaking to a financial advisor. In other words, if someone is compensated purely based upon a sale, then the information they provide to you may be strongly influenced by the desire to close the sale.
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