fee-based vs. commission-based annuities
đź“š A guide to help new financial professionals understand who can sell what annuity products, what licenses are needed, and how to stay compliant when using product-selection tools.
đź—‚ Product Licensing Table
| Product Name | Type of Annuity | How It’s Sold | Who Sells It | Licenses Needed |
|---|---|---|---|---|
| Allianz 222 | Fixed Indexed Annuity (FIA) | Commission-based | Insurance Agent | ✅ State Insurance Producer License |
| Athene Ascent Pro 10 | FIA | Commission-based | Insurance Agent | ✅ State Insurance Producer License |
| Nationwide Advisory Retirement Income | Variable Annuity (Fee-Based) | Fee-based (no commissions) | RIA / IAR |
✅ Series 65/66 ✅ VA Insurance License ❗ May need insurance consultant license in some states |
| Lincoln InvestmentSolutions Advisory VA | Variable Annuity (Fee-Based) | Fee-based | RIA / IAR |
✅ Series 65/66 ✅ Insurance License ❗ Possibly consultant license |
| Jackson Market Link Pro Advisory | Registered Indexed Annuity (RILA) | Fee-based (no commissions) | RIA / IAR |
✅ Series 65/66 ✅ Insurance License ❗ Possibly consultant license |
| Brighthouse Shield Level Select Advisory | RILA | Fee-based | RIA / IAR |
✅ Series 65/66 ✅ Insurance License |
| Pacific Life Pacific Advisory VA | Variable Annuity (Fee-Based) | Fee-based | RIA / IAR |
✅ Series 65/66 ✅ Insurance License |
🔍 Quick Definitions
- Fixed Annuity – Pays a guaranteed interest rate (low risk).
- FIA – Interest tied to market index with downside protection.
- VA – Invested via subaccounts; more risk and growth potential.
- RILA – Like FIAs, but SEC-registered and used by RIAs.
🛡️ Compensation Models & Licensing
1. Commission-Based
-
Distributed Through: Brokers or insurance agents.
Licenses:
- Series 6 or 7 + Series 63 for VAs
- State insurance producer license for FIAs/VAs
2. Fee-Based (Fee-Only) – RIA-Focused
- Distributed Through: Registered Investment Advisors / IARs only.
-
Compensation: Advisory/AUM fee no commissions; IRS permits pre-tax fee withdrawals
Licenses:
- ✅ Series 65 or 66
- âś… Insurance license for annuities
- âť— Insurance consultant license required in ~27 jurisdictions
- Example: Jackson, Brighthouse, Nationwide advisory annuities.
3. Fee-Only Advisors
- Similar to fee-based; advisors paid directly by clients, not commission.
- Licensing same as fee-based; must monitor state rules for consultant license.
⚙️ Compliance Tools: Product Deck Filters
Ensure platform compliance by adjusting your Product Deck using a "3‑Box Filter":
- Distribution Channel (Commission vs. Fee)
- Your Licensing
Only enable channels aligned to your status (Insurance Agent, B/D Rep, or RIA/IAR).
âś… Summary Table
| Role / Model | Sellable Products | Licensing Required |
|---|---|---|
| Insurance Agent | FIA, Fixed Ann. (commission) | State Insurance Producer License |
| B/D Rep | VA, FIA (commission) | Series 6/7 + 63 + Insurance License |
| RIA / IAR (Fee‑Based) | Fee‑based FIAs, VAs, RILAs | Series 65/66 + Insurance License ± Consultant License |
| Fee-Only Advisor | Same as RIA | Series 65/66 + Insurance License ± Consultant License |
đź“Ś Important Note
This guide is for educational purposes only. Always reach out to your IMO, FMO, broker-dealer, or group organization if you're unsure about what products you're allowed to sell. They can guide you on:
- What licenses are required
- What states require special insurance consultant licensing
- Which products are approved for your channel
đź“š Understanding Annuity Sales: Products, Licensing & Distribution