\n Nick Strain, senior wealth advisor and chair of the wealth advisory committee at Halbert Hargrove.\n <\/p>\n
\n Halbert Hargrove senior wealth advisor weighs in on the products’ guaranteed income upside, the operational drag and his wish list for carriers.\n <\/p>\n
Nick Strain spent more than a year building a retirement income plan for one client out of four separate annuities. His firm didn’t charge an advisory fee on any of them.<\/p>\n
That trade-off shows where annuities stand for many fee-only registered investment advisors. The products solve problems a stock-and-bond portfolio can’t, but the work of using them still fits awkwardly inside an RIA practice.<\/p>\n
“Providing guaranteed income provides a lot more safety than traditional diversified mutual fund or ETF portfolio. [where] there’s no guarantees,” said Strain, senior wealth advisor and chair of the wealth advisory committee at Halbert Hargrove, in a recent interview with InvestmentNews. “Guaranteed income does put clients at ease,”<\/p>\n
Where annuities fit for RIA clients<\/p>\n
At Halbert Hargrove, Strain sees two common entry points for annuity conversations. The first is a new client who arrives holding an old annuity and has forgotten why they bought it. Cashing out can trigger a large tax bill, so he often uses a 1035 exchange \u2013 a tax-free transfer from one annuity contract to another. The exchange can capture a higher payout rate or move the client from a variable contract into an indexed product with a floor.<\/p>\n
The second scenario involves conservative clients nearing retirement with large positions in cash, CDs or Treasuries and little appetite for more stock market risk.<\/p>\n
“You want to stay conservative, but maybe being in Treasuries or cash, high-yield cash for a long period of time might not be the best long-term solution for you,” he said.<\/p>\n
An increasing number of clients have joined the firm with existing annuities over the past five years, Strain said. And as more people take an interest in the products<\/a>, he said there’s a growing onus for advisors to incorporate annuities into clients’ financial plans at the firm, as opposed to them getting recommendations elsewhere.<\/p>\n “I’d rather be part of the conversation than find out what happened six months later and not be happy with whatever was recommended,” he said.<\/p>\n Citing a 2025 LIMRA study, Strain said only about 1% of total annuity premiums currently come from fee-based products<\/a>, which has hindered adoption among RIA firms that operate on a fee basis. The broader annuity industry, meanwhile, hit a record\u00a0$464.1 billion in sales last year.<\/p>\n Read more:\u00a0Is $100 billion the new normal for quarterly annuity sales?<\/a><\/p>\n