The Labor Department issued new consumer protection rules for annuity buyers. As we have written in previous newsletters, Annuities are surging in popularity - $215B were sold in the first six months of 2024. Insurance agencies and companies are fighting the new rules as they protect consumers against misleading claims and excessive charges. The more complex the annuity, the more likely the fees will be excessive.

Fixed Index Annuities are increasingly popular for their protection against loss. However, they carry a baked-in commission of 8-15%. Thus, they are a good deal for the "financial advisor"/agent and the insurance company, not for the buyer.

Smarter Bear is a fee-only fiduciary and doesn't sell annuities. We analyze annuities that clients have been sold before becoming clients and, when indicated by client circumstances, sometimes recommend that clients purchase straightforward, no-commission, low-fee annuities from highly rated companies. The new consumer protection rules are likely to be overturned. Our recommendation on annuities remains the same: Seek expert advice from someone who is not making money on the annuity sale before buying.