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Why haven't I heard about QLACs from my investment advisor or stock broker?

QLACs were only introduced in 2014. But, if your advisor is compensated based on assets under management, then the answer may also lie in how your investment advisor or stock broker is compensated.

Fo example, in her 2015 article on CNBC.com, Debora Nason interviewed a fee-based Certified Financial Planner,  Marcio Silveira, who noted this potential conflict of interest with respect to QLACs:   "When a longevity annuity is purchased, there is less money to be invested in the advisor-managed portfolio....this means [fewer] assets-under-management fees for the fee-only advisor....the lack of commissions...creates a conflict of interest to the detriment of the client."  When evaluating a QLAC it is often best to keep this conflict in mind and seek out advice from advisors who do not receive compensation based on assets under management, for example fee-only Certified Financial Planners (CFP) or Accountants (CPAs) specializing in Personal Financial Planning.

Ron Ryan

Ron Ryan is the author of this solution

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Updated on Sat, 26 Aug 2017

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