Some securities firms on Wall Street will begin selling indexed annuity products soon, according to Insurance News Net’s article “Wall Street Eyes IAs.” Linda Koco of Annuity News.com got the information from Advantage Compendium of St. Louis. While they will be sold by the securities firms, they will still be insurance products rather than securities. After the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 classified indexed annuities as insurance products rather than securities, people may be confused as to how securities firms will sell the products. According to the article, the interested firms have developed relationships with insurance companies in order to sell the indexed annuity products.
Many analysts see this entry into the marketplace as a good thing. Securities firms will release more information to the public and keep them better informed about fixed indexed annuities and that can mean more sales from an informed public. The names of the firms interested in selling these indexed annuities have not yet been released, but apparently many have slowed down sales of their variable annuities in anticipation. They are likely to use indexed annuities like a “crossover product” because they are in between fixed and variable annuities. It will help when transitioning from securities to insurance products like annuities. It is likely that they will begin selling the indexed annuity products through their own distribution channels, but will eventually expand to independent agents based on their success.