SIE EXAM CANDIDATES, THINKING ABOUT SELLING RILAS TO CLIENTS IN THE FUTURE? THEN CAREFULLY CONSIDER THE VARIOUS CHARGES THAT RILA INVESTORS FACE!
Several weeks ago, Bob Eder's blog discussed RILAS or Registered Index Linked Annuities. In this blog Bob discusses the major penalties and charges that can reduce a client's return. These penalties include, but are not limited to, surrender charges; interim value adjustments and mid-term investment withdrawals; and tax penalties. This information is based on a publication of the SEC's Office of the Investor Advocate entitled "Report on Activities Fiscal Year 2023." A "RILA" has both insurance components and investment components. An investor puts money into a RILA, generally with a minimum requirement of $10,000 to $20,000. After making this initial investment, the RILA purchaser then decides how much premium to put into investment options. These investments are relatively short-term, generally not exceeding six years. This short-term character of RILA investments means that the investment options generally will not exceed the life of the RILA contrac...