Jackson National Life Insurance Co., the largest annuity seller, is broadening the distribution of its fee-only annuities to try to capitalize on the growing ranks of independent registered investment advisers.
The insurer has partnered with DPL Financial Partners, an insurance network for RIAs, to distribute three fee-based annuities (two variable and one indexed). It's the first time Jackson National has moved beyond its traditional outlets — independent broker-dealers, wirehouses and banks — to distribute its annuity products through independent RIAs.
"For us it is the first time we're trying to expand our overall distribution footprint," said Scott Romine, president of advisory solutions for Jackson National Life Distributors. "A lot of the growth in fee-based [annuities] has been in the independent RIA space, so we want to position ourselves there for the growth."
Jackson National distributes annuity products through more than 700 banks and broker-dealers; 170 of those currently distribute its fee-based annuities, Mr. Romine said. DPL distributes commission-free insurance products to roughly 200 RIAs, thereby doubling the number of firms through which Jackson National can sell fee-based annuities.
Jackson National is the largest annual seller of annuities, the majority of which are variable products. Roughly 96% of the company's $13.4 billion in sales last year through the third quarter were of variable annuities, according to data from Limra, an insurance industry group.
Insurers began to develop more fee-based annuity products after the Department of Labor fiduciary rule was issued. The rule, now defunct, made fee-based rather than commission investment products held in individual retirement accounts more attractive from a compliance standpoint.
While annual sales of fee-based annuities are still small compared with overall annuity sales, they have seen "modest but steady growth" since the rule's issuance, according to the Insured Retirement Institute's state of the industry report published in December.