A Simpler Mousetrap

MetLife's newest variable annuity has only one rider-and three underlying mutual funds.: Advisors have long complained that variable annuities are so complex and the costs so opaque that they are difficult to understand, let alone sell. Companies have made occasional stabs at lowering costs and simplifying annuities in the past, but MetLife is pushing the envelope with its new Simple Solutions, which is so simple, even platform reps can sell them. And that's a first.

There are over 50,000 licensed platform reps in the U.S., half of whom, as Series 6 licencees, are technically able to sell variable annuities. But few have done so because managers worry that the complexity of VAs could raise compliance issues. MetLife's offering, which launched July 20, can be sold by 6 platform reps as well as Series 7 advisors.

"We organized a focus group of bankers last year in Dallas and they all told us the same thing," says Kevin Crowe, managing director of bank channel operations at Metlife investors. "They wanted something simple." He adds that simple solutions can be a source of income for platform programs while interest rates remain low, making their usual staples, fixed annuities and CDs, less desirable...

BIC: A Simpler Mousetrap