Annuities 2.0: How RIAs Are Rethinking a Once-Maligned Product
Speaking at the Advisors to Watch Summit, Security Benefit’s Mike Reidy and DPL Financial Partners CEO David Lau made a simple but provocative case: annuities aren’t the problem—commissions are. Strip out conflicted compensation, integrate cleanly with RIA tech stacks, and suddenly annuities look less like a sales product and more like a powerful planning tool.
Reidy opened by noting that fewer than 25% of advisors in the room currently recommend annuities. That resistance, Lau argued, has far more to do with old perceptions than with the modern products now available to fiduciary advisors.
From Commission-Driven to Client-Driven
Lau’s background is building fee-based, RIA-focused insurance platforms. At Jefferson National and now DPL, his mission has been consistent: take the core structural strengths of annuities—tax deferral, principal protection, and lifetime income—and remove the commission load that made them expensive, opaque, and distrusted.
Remove commissions, he said, and you effectively cut the cost of many annuities by 80–90%. What’s left is a value product that can be used, not sold:
For lifetime income that’s more efficient than bonds
For tax deferral on non-qualified assets
For downside protection within a retirement plan
DPL sits between RIAs and carriers, working with 20+ insurers and roughly 100 products, all designed for a fee-based environment. They’ve integrated with major portfolio systems—Black Diamond, Orion and others—so annuities show up on the same screens as ETFs and mutual funds, and advisor fees can be billed cleanly.
The Biggest Barrier: Old Perceptions, Not Product
When DPL talks to firms, Lau said, resistance rarely comes from the facts of modern annuities. It comes from the past: “I don’t do annuities. They’re complex. They’re expensive.”
That might still be true in the traditional commissioned world, but fee-based annuities have been around for a decade. The real challenge is getting advisors to revisit an asset class they wrote off years ago.
To create a soft on-ramp, DPL often starts with what clients already own. Many RIAs discover that 25–40% of their households already hold annuities—usually legacy contracts sold years earlier. DPL’s tech allows advisors to upload a statement, instantly analyze the existing policy, and compare it to lower-cost, commission-free alternatives. Often that means:
Lower fees
More income
And the ability to bring the annuity under the advisor’s management
From there, the conversation can shift from “I don’t do annuities” to “How can I improve what my clients already have?”
Where the Funding Comes From
When advisors consider new annuities, the obvious question is: What do I sell to fund them? Lau’s answer is grounded in both research and math: if the primary purpose is retirement income, think of annuities as a replacement for part of the fixed income allocation—not equities.
