Annuity Collections May Replace Swiss Army Knife VA Contracts

Galvin suggested that, these days, clients may need several different annuities, with different strategies, to meet different types of income needs, and other financial needs, at different stages of their lives.

Joe Toledano, a managing director at Morgan Stanley's wealth management unit, said that, in the past, variable annuities were built as financial Swiss Army knives.

"Today," Toledano said, "it seems to be moving toward a separately packed approach."

In the past, Toledano said, compensation for sales and distribution players was often bundled in a way that made mixing and matching different products difficult, Toledano said.

Today, Toledano said, the move toward fee-based products is making it easier to snap different products together, and new technology could strengthen that trend.

In some cases, Toledano said, a customer could even combine variable components from one company with product guarantee features from another company.

Galvin said one key is to help clients understand that the term "annuity" can refer to a wide range of products, just as the word "car" can refer to either a Ferrari or a Ford Escort.

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