Amid the uproar over changing fiduciary regulations, the volatility of annuities sales and the introduction of myriad new annuity products and features, it can be hard to keep up. Kent Sluyter, president of Newark, N.J.- based Prudential Annuities, a unit of Prudential Financial, helped shed light on what's going on and what to expect going forward in an interview with Financial Advisor magazine.

Q: What is the current state of the annuities market? And why have industry sales been disappointing lately?

KS: I would describe this as an inflection point. Certainly we saw a drop in overall sales in 2017. A number of things contributed to that, from regulatory headwinds to continual strong equity market performance, which made some people forget that markets can go the other way. ... But expectations for this year are for a slight uptick in sales, maybe in the 5 percent to 10 percent range. That's partly due to some near-term clarity around what the DOL [rule] is not going to be, though we're still not sure exactly what it will be. Also, market volatility in the early part of this year helped reinforce the notion that markets don't always go in just one direction.

That said, the industry still has a challenge in getting past the perception that annuities are complicated and expensive products. We want to help advisors better understand how to fit annuities into their planning.

Q: What do advisors need to know, or remember, about annuities?

KS: A lot of advisors tend to focus on the accumulation-planning needs of their clients, but the demand for income planning has never been greater. The annuity product has unique capabilities that are particularly well suited to at least a portion of the income planning that consumers need.

Of course, in this post-DOL environment, advisors have to be extra diligent around what they're offering and not offering. If we can try to overcome some of the complexity of these products, that might make annuities a little more transparent for advisors and their clients.

Q: One bright spot has been fixed-indexed annuities (FIAs). Why do you suppose they have been the big sellers in recent years, and do you expect that to continue?

Yes, over several years we've seen an uptrend in fixed annuities. They're now overtaking variable annuities. And FIAs represent a significant component of those sales, which is likely to continue.

In fact, Prudential recently introduced our first FIA, called PruSecure Fixed Indexed Annuity. PruSecure FIA is a single-premium annuity with a simple structure and customizable solutions. It was designed in response to consumers' and advisors' wishes for simplification and ease of personalization.

Q: What differentiates your FIA from the competition?

First, it has a fairly diverse set of index options [S&P 500, MSCI EAFE, Dow Jones U.S. Real Estate Index, and Bloomberg Commodity Index]. Advisors can mix and match indexes, with a point-to-point crediting strategy. Second, there are multiple crediting periods, from one-, three- and five-year terms, offering more upside potential. It's an accumulation-focused product with downside protection. Not a lot of bells and whistles. ... We did not add any riders [but] we will probably do that at some point.

Q: What do you say to those who charge that annuities have sometimes been promoted or marketed inappropriately, even deceptively?

Well, annuities are intrinsically complex, which does increase the risk of misunderstanding. The optionality that exists in many contracts is probably a hard thing for advisors to fully convey to clients. We wind up having very lengthy prospectuses. But we as an industry can improve on articulating what these products do and don't do.

Q: Do you think annuities fit well with the idea of fiduciary responsibility?

They certainly can. Annuities are not the answer for everybody, but they can play an important role in helping many people secure retirement income, which is important. And they can do so in full compliance with good fiduciary standards.

Q: Any other misconceptions you'd like to straighten out?

There are many misconceptions. For instance, one you hear a lot is that annuities don't pay out if the annuitant dies young. People may not understand the components that can provide death benefits and guaranteed payouts to beneficiaries. Also misunderstood is the flexibility of many annuities, and the ability to get access to the money that's put in.

Q: Finally, what are Prudential Annuities' future plans?

We're working to expand our annuity solutions so we're sure to have the right product for the right client. We'll also be extending our distribution reach, making these solutions more accessible to more advisors. But we're also focused on looking beyond the annuities business, to design offerings that bring the full strength of Prudential to bear.

Our aim is to address a wider spectrum of needs, from the most sophisticated advisor to the individual who is just looking to save some extra money for retirement. We're learning to improve our relevance and reach.