08.25.21
Morningstar on Why Annuities Still Struggle to Gain Wide Acceptance
by: Tracey Longo
There are three barriers to the integration of annuity products in retirement plans. These are the liability risks under ERISA that plan sponsors face when providing annuities to employees; the fact that no federal guarantee exists for annuities; and the lack of a uniform federal investment advice standard for annuities, Morningstar said. Lack of uniform investment advice on annuities also stands in the way of investors and employers getting more comfortable with the contracts. “Given the lack of standardization in how annuity information is presented, these disparities in standards for advice present a land mine for retail investors,” Morningstar said.
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