After a period of tremendous creativity, where insurance companies were adding all kinds of bells and whistles to variable annuities, the industry needs to step back and streamline the products to appeal to customers and financial advisers alike, according to research company Novarica.

“Complexity and frequent product redesign hurts variable annuity sales by extending the sales cycle when compared to other types of investments, as well as increasing compliance costs and confusing distributors,” said Robert J. Ellis, principal and head of wealth management at Novarica. “Based on our research with both distributors and manufacturer, we believe that product simplicity and less frequent redesign will lead to greater profitability.”

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