The Insured Retirement Institute, a lobbying organization for manufacturers and distributors of annuities, has issued a review of the events of 2013 and a preview of its expectations for 2014 in the areas of annuity products, sales, and regulation.
The “State of the Insured Retirement Industry” report offers a comprehensive appraisal of the annuity industry, with special attention to reasons for optimism: rising bond yields, aging Baby Boomers, innovative annuity products, and support from the Obama administration for guaranteed lifetime income tools.
On the issue of social media, the report notes that “the financial services industry lags behind other industries in using social media.” One problem: broker-dealer face an estimated social media startup cost of $50 per month per registered rep just for “regulatory monitoring and archiving expenses.”
The report introduces a relatively new acronym, “GOVA.” It stands for “growth-oriented variable annuities,” and refers to contracts with low fees, numerous investment options and no lifetime income benefits.
In a linguistic gesture that may dismay some fund companies, the report refers to “volatility funds” when describing managed-volatility funds, which use some combination of dynamic asset allocation and derivatives strategies to protect investors from extreme market fluctuations.
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