FP50 2018: Which IBDs made the most in annuity sales?

The largest independent broker-dealers’ combined annuity sales have fallen each of the past three years, but the products still make up nearly one-sixth of their business.

Total annuities revenue across the 50 largest IBDs participating in Financial Planning’s annual FP50 survey of the industry dropped 10% last year to $4.4 billion. The products constituted 17% of their more than $25.7 billion in revenue, down from 21% in 2014 but still a higher share than any other product.

The lower sales reflect an industrywide slump, albeit with a different mix of variable and fixed contracts than seen throughout the broader financial services. Overall, sales of annuities slipped 8% in 2017 to $204 billion, a three-year low, according to the LIMRA Secure Retirement Institute.

The now-vacated fiduciary rule had prompted issuers and IBDs to alter their sales practices and modify products to comply with the enhanced scrutiny on retirement accounts. After the rule’s demise earlier this year, though, LIMRA boosted its forecast for sales in 2018, expecting a rise of 5% to 10%.

Last year, nearly three quarters of annuity purchases by clients of the largest IBDs were variable contracts in 2017, amounting to nearly $3.2 billion in revenue. In the overall market, fixed sales outpaced variable sales in 2016 by $12 billion and maintained the same margin last year.

Eight of the 10 IBDs reporting the largest revenues from annuities for the year also made last year’s list, and one firm alone — LPL Financial — again disclosed nearly double the annuity sales of any other IBD. Overall, only three of the top 10 firms took in lower annuity revenue in 2017, compared to eight of the top 10 in 2016.

Major IBD network Advisor Group and No. 6 IBD Northwestern Mutual didn’t provide their sales figures. Additionally, firms showed wide variation in the range and specificity of their responses to the survey with respect to their payouts to advisors on the sales commissions from the products.

To see the list of the top 10 firms ranked by annuity revenue, scroll though our slideshow. For a list of the top 10 IBDs ranked by fastest-growing payouts, click here. To view a full recap of the last year in the IBD space, see FP50 2018: Independent broker-dealers adapt to survive.