There has been recent growth in fee-only variable annuity market. Interest rates have been very low for quite some time and speculators think the low interest rates will continue for most of 2013. Carriers are finding it difficult to continue offering generous living benefits and are looking to survive in low-yield economy.
Registered Investment Advisor (RIA) buisness is easier for carriers to manage because there are no living benefits attached. Morningstar terms these policies as I-share contracts. These are variable annuities designed for fee-only/non-commissioned use in an advisory program, McCarthy says. The surrender charges and policy fees are structured to fit into the RIA business model, in which advisors typically charge fees on an assets-under-management basis.