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DOL Fiduciary News: August 25, 2017

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DOL fiduciary rule driving fundamental shift in variable annuity market

InvestmentNews; Aug 24, 2017 @ 1:45 pm

The Department of Labor's fiduciary rule is shaking things up in the variable annuity market.

While the regulation has accelerated the downward trend in overall variable annuity sales for the past several quarters, only recently has the rule's impact extended to the market share of different VA products.

The fiduciary rule, which raises investment-advice standards in retirement accounts, affects investment products sold in qualified accounts, such as individual retirement accounts, rather than non-qualified accounts.

Just over 60% of VAs were sold into the qualified market somewhat consistently since the fiduciary rule was finalized in April 2016. That figure started to decline in the most recent quarter for the first time.

Fiduciary Rule Whacks Annuities

401kSpecialist; August 24, 2017

Fiduciary rule fallout continues, with a (not unexpected) decrease in annuity sales of 10 percent, to $105.8 billion, when compared with the first six months of 2016.

First half sales haven’t been this low since 2001, LIMRA Secure Retirement Institute reports in its Second Quarter 2017 U.S. Retail Annuity Sales Survey.

Second quarter results for total annuity sales were $53.9 billion, a slight uptick from the first quarter, but an 8 percent decline from this quarter last year.

This is the fifth consecutive quarter of decline in overall annuity sales. It is also the sixth straight quarter fixed sales have outperformed VA sales, which hasn’t happened in almost 25 years.

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