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No-Load Annuity Products Are A Winner After the DOL Rule


There are certainly winners and losers when it comes to the DOL Fiduciary Rule. Although it won’t take effect until the beginning of 2018, companies and advisors are working hard so that they comply with the BICE guidelines before the legalities take place. In an article for Forbes Magazine, John Wasik listed his “Four Biggest Winners Under (the) New DOL Rule.” With the new guidelines in place, retirement advisors will have to put their clients’ best interest at the forefront of any financial recommendations. This obviously benefits consumers and investors who might not have always been getting the best deal on financial products. He warns that with so much time before the rule takes effect, there is a possibility that Congress will lessen the standards or scrap the rule altogether. Wasik hopes this will not be the case, as do many consumers out there just looking for their best interest to be taken to heart.

The first big winners are no-load annuity and mutual fund companies. No-load annuities and funds are not new, but we will most certainly see an increase in sales of these types of annuities going forward. Wasik thinks that it will be hard to justify commissions on products used in retirement plans like 401ks. Many companies already offer annuity products that are sold without commissions. Some of the top ones are Fidelity, Jefferson Life, Ameritas and Vanguard. These no-load annuities are sold with low fees and no commissions attached. There aren’t any surrender charges with no-load annuities either. They don’t have a lot of bells and whistles like some other annuity products, but they are a good, low cost option when it comes to retirement planning. No-load mutual funds are sold most often by Fidelity, Vanguard, Schwab and T. Rowe Price.

Exchange-Traded Funds (or ETFs) are the next big winner, according to Wasik. These are mutual funds that are listed on stock market exchanges. They are very inexpensive and transparent compared to open-ended mutual funds. Wasik thinks that we will see more ETFs in retirement plans, which will help BlackRock, State Street, Schwab and Vanguard. He also forecasts a large increase in robo-advisors. The third big winner from the DOL fiduciary rule will be in an increase in passive investing. Active investing isn’t reaping the benefits many thought it was and many investors are putting their money into passive index funds. This current trend is likely to increase even more after the DOL rule and the amount of money in active funds versus passive funds will likely become closer in value.

Finally, true fiduciaries will be a big winner with the DOL fiduciary standards. They’ve always been around and always been legally bound to make decisions in the best interest of their clients. They offer advice on retirement planning, taxes, insurance, investments and all financial planning. Their fees are flat and you are usually charged an hourly rate or a yearly percentage of your assets. It has always been their job to keep their advice in your best interest. There are four major winners after the DOL fiduciary rule takes effect. Investors will receive more tailored advice that keeps their best interest in the forefront. No-load annuity and mutual fund companies, ETFs, passive investing and true fiduciaries are the big winners, according to Wasik. Take a look at the low costs associated with a no-load annuity and compare it’s benefits in your financial plan. An expert at Annuity FYI would be happy to help answer any of your questions about no-load annuities or the DOL fiduciary rule.

Written by Rachel Summit

Follow Rachel, aka Finance Mama, on Twitter and Google+


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