Fees

The Securities and Exchange Commission (SEC) is interested in reducing the complexity associated with annuity information. The SEC would like to try and develop user-friendly prospectuses that allow for greater transparency of product features and fees as well as an enhanced ability to compare like product types.

Two leading companies are partnering to provide a new annuity offering. MetLife has developed the "MetLife Growth and Guaranteed Income (MGGI)" product that will be distributed exclusively through Fidelity . The MGGI is a deferred variable annuity that contains a guaranteed lifetime withdrawal benefit ( GLWB ) that, depending on the age of the client, ranges between 4 and 6 percent of the initial single premium. Fidelity will manage a relatively simply fund offering and the M&E fees on the...

There is a great op-ed piece in the Washington Post that discusses what the authors refer to as the "retirement problem." In a detailed article, the authors lay-out a case for why it may not be so wise--from a public policy perspective--to leave all retirement planning decisions in the hands of individuals and the free market. In a nutshell, the authors point out that: On the whole, we save too little. On the whole, retail investment returns lag average returns by significant margins due to...

The House Financial Services Committee passed the Investor Protection Act of 2009. This legislation would have a meaningful impact on the sales of annuities and mutual funds as the current suitability standard would be replaced by a much higher fiduciary standard. The net effect would be a big win for financial services consumers. Currently, suitability standards require that financial advisors determine whether a product is appropriate for a given client profile, with risk tolerance as one of...