Luma Insights:

Suitability Made Simple: Luma’s Annuity Compliance Software

Advisors and regulatory leaders want to do what is in the best interest of their clients to help them meet or exceed their financial goals and expectations. While best interest concerns have impacted the entire industry, the annuity category has experienced additional challenges due to the increasing diversity and quantity of these types of financial vehicles. As a result, firms and advisors now experience more workflows, more requirements, and ultimately, less time to focus on providing superior value to their clients.

The challenge of finding suitable annuity solutions can now be made more efficient through technology. Luma Compare, Luma’s new annuity comparison tool, helps advisors to instantly see multiple annuity options all in one place. We’re simplifying researching, comparing and positioning annuities for the future, despite the growing complexity in the marketplace.

In the past, the annuity business process was less complex with fewer products to research, track, and manage. Providing superior value and client experience is becoming more challenging, because according to the Secure Retirement Institute, 70% of annuity sales in 2008 were generated from Variable Annuities, compared to 30% from other annuity products.  Today, the annuity marketplace generates sales from a more diverse set of solutions and is much more complex than in years past. Product growth, coupled with the evolution of suitability obligations, has made advisors’ desire to provide a superior client experience more challenging. 

Specific to suitability, manyfinancial professionals have had to shift their focus from pre-existing suitability obligations to learning a new standard, one of which – Regulation Best Interest (“Reg BI”) –has been buzzing around the industry for the last couple of years. Officially put into place June of 2020, acting in the client’s best interest for retirement products and life insurance includes more education, more research, and more time commitments – for both compliance teams and their advisors. While challenging, this confluence of annuity product growth and diversity, combined with the Reg BI obligation for retirement products, presents opportunities that many financial professionals are leveraging through innovation and technology.

Given recent financial technology improvements, finding the ideal annuity product that meets suitability requirements and aligns with the client’s best interest can now be realized within minutes. By leading the way in the industry through its innovative data modeling and third-party integrations, this annuity compliance software allows financial professionals to instantly discover and test new products, increasing objectivity. Advisors can easily review a diverse set of annuity products and, with a few simple clicks, deliver superior service to their clients while remaining compliant with suitability and Best Interest requirements.

Click here to learn more about Luma’s Annuity Comparison Tool and how it simplifies the annuity category for advisors worldwide.