Incentives are often offered to salespeople when they hit certain goals and usually include such rewards as big bonuses, trips, and other expensive gifts. However, a growing chorus of voices are calling for greater regulation of incentives paid to those that sale annuities due to the conflict of interest it creates. The heart of the problem is that the annuities that earn the greatest incentives are usually those that are complex and are often geared towards the best interest of the provider rather than the buyer. Senator Elizabeth Warren has emerged as the harshest critic of the practice claiming that up to $17 billion per year is taken out of the pockets of individuals who buy the less favorable, but more profitable, plans. However, as the issue is generally one of state rather than federal law, it is unlikely that concerted action will be taken to confront the issue any time soon.
See Allan S. Roth, The Seamy Side of Annuity Sales, Next Avenue, November 12, 2015.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.
