Individual investors can now get custom-tailored referrals to fee-only advisors who specialize in commission-free annuities, thanks to a new program from DPL Financial Partners.
DPL, a Louisville, Ky.-based insurance platform for fee-based RIAs and other fiduciaries, said it launched the referral program after receiving numerous questions about commission-free annuities and insurance products.
“Demand for annuity products from individual investors has never been higher and, increasingly, they are becoming aware of commission-free solutions,” DPL founder and CEO David Lau said in a press release. “They read about DPL in the media and reach out to us to access these products.”
DPL was launched in 2018 by Lau, a veteran of insurance giant Jefferson National. DPL also produces proprietary tools and technologies that enable RIAs to incorporate these annuities into their practices.
The referral progam marks the first time the firm is working directly with retail clients.
"Under the program, DPL will ask interested investors a few basic questions about the kind of advice they are interested in and their location and then match them with a fiduciary advisor who can help," the press release said. "Advisors in DPL’s nationwide network can apply to participate through their DPL consultant."
The DPL network comprises more than 1,200 RIA firms nationwide, ranging in size from less than $50 million to more than $1 billion in assets under management, according to the firm.
The announcement comes at a time when data is showing a heightened interest in annuities, which have been able to offer better payouts as the Fed has raised interest rates to combat inflation.
As rates rise “clients are fleeing bond funds and flocking to fixed annuities,” said Tim Rembowski, a DPL vice president. For instance, he said, a five-year Treasury note is currently yielding 4.35% while a five-year fixed annuity from an A+ rated carrier is generating 5.5%. “Clients are leaving cash and buying fixed annuities as a way to try and keep up with inflation."
One of the chief complaints about annuities, however, has long been that they are too expensive. That’s why, years ago, Lau set out to change the industry. At Jefferson National, he spearheaded its introduction of low-cost, no-load variable annuities. He said he then started DPL as a "kind of personal crusade" to move the industry toward more commission-free products that are well suited to fee-only advisors.
What’s good for the annuity industry is also good for consumers, supporters say. “Any effort to make annuities more available, accessible and affordable to Main Street consumers is a very positive development,” said Cyrus Bamji, chief communications officer at the Washington, D.C.-based Alliance for Lifetime Income.