In keeping with the national focus away from suitability standards and towards an industry-wide fiduciary standard, United States Senator Elizabeth Warren from Massachusetts has launched an investigation of rewards and incentives offered to annuity dealers. In letters sent to fifteen of the nation’s largest annuity providers on April 28, Senator Warren raised concerns about the rewards and incentives that these companies offered to brokers/dealers who sell securities to the American public. Her letters explain that annuity providers offer a vast range of perks – from cruises to international travel to iPads to diamond-encrusted “NFL Super Bowl style” rings to cash and stock options – to entice sales of their products. Warren raises the concern that these incentives present a conflict of interest for agents and financial advisors that could result in the agents providing inadequate advice about annuities to investors and selling products that may not meet the retirement investment needs of their particular buyers.

Senator Warren’s letter requested that annuity providers provide information about the incentives they offer, the number and value of the incentives awarded, and the companies’ policies for disclosing these potential conflicts of interest. Companies to whom the letter was issued include: Jackson National Life, AIG Companies, Lincoln Financial Group, Allianz Life, TIA-CREF, New York Life, Prudential Annuities, Transamerica, AXA USA, MetLife, Nationwide, Pacific Life, Forethought Annuity, RiverSource Life Insurance, and Security Benefit Life Insurance Company.

A PDF copy of the letters is available here.


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