RETIREMENT
ment at PGIM, a unit of Prudential Financial in Lexington, Ky.
The“ defined outcome structure” resonates with both advisors and their clients, he adds. Blanchett expects to see more, similar products emerge and grow in other areas. For instance, he points to the ballooning popularity of buffer ETFs, also known as defined-outcome ETFs— a type of exchange-traded fund that seeks to boost returns by selling options on the core investment.
Like RILAs, buffer ETFs can provide a floor against market losses in exchange for a cap on how much investors profit on gains. And they are also remarkably popular. According to Morningstar, investors poured some $ 33.6 billion into these buffer ETFs in the five years ending February 28, 2025. This year, a number of prominent pension funds have dumped their hedge funds and reallocated those assets into these ETFs.
Equitable Leads The Pack
As of the first quarter of this year, the most recent figures available, the top RILA seller was Equitable, the firm that created the nation’ s first version of the product some 15 years ago. Equitable posted more than $ 3.53 billion in RILA sales in the quarter, as measured by LIMRA.
In second place, with more than $ 2.35 billion in RILA sales over the first quarter, was Allianz Life of North America. Just behind that was Prudential, with $ 2.34 billion in quarterly RILA sales. Coming in at fourth place was Brighthouse Financial, with $ 1.96 billion. Rounding out the top five for the quarter was Lincoln Financial Group, which sold more than $ 1.30 billion worth of RILAs.
Part of the product’ s market dominance has to do with the stock market’ s recent volatility, analysts say. Retirees and pre-retirees want to maintain exposure to equities, but they also want a degree of protection against stock markets going down.
A bear market would probably depress sales of RILAs, they postulate. So might a rise in interest rates, which would make fixed-income products more appealing.
RILAs have also dominated because of the monumental rise in the number of carriers offering them. Ten years ago there were just three. Now there are 22.“ As new carriers enter the market and introduce innovative features— including options tied to lifetime income— RILAs are evolving to meet a broader range of investor needs,” says Steve Goldberg, an assistant vice president at Pacific Life Insurance Company in Ladera Ranch, Calif.
New carriers create healthy competition and product innovations that can benefit clients, he adds, and he foresees RILAs as“ positioned for continued growth.”
Too Much Of A Good Thing?
Some industry watchers, however, argue that the RILA market has become oversaturated.
Retirees and pre-retirees want to maintain exposure to equities, but they also want a degree of protection against stock markets going down.
“ Everyone is coming out with a RILA,” says Paige Christofferson, chief business development officer at Berthel Fisher Companies in Cedar Rapids, Iowa.“ People want some level of safety. They want to know that, if the market goes down significantly, they do not have full exposure to a large downturn that could cause a major uphill battle.”
But, she continues, when investors start to have less worry about market fluctuations, that could be the first sign that RILA sales have topped out.
Then again, clients may continue to be attracted to the product’ s“ value proposition,” which supporters contend can’ t be found elsewhere.
“ We’ ve seen the market go from products that offer no downside protection, [ like ] variable annuities, to structures that offer [ limited ] upside in exchange for full downside protection,” says Ben Wang, a portfolio manager at Janus Henderson in New York City, referring to fixed-index annuities.“ As client needs continue to evolve, RILAs offer a unique middle ground [ of ] a moderate amount of protection with greater upside potential.”
( Indeed, in the first half of 2025, fixedindex annuity sales slipped 1 % year-overyear to $ 59.2 billion.)
Wang’ s colleague, Michelin Sharp, Janus Henderson’ s Denver-based head of the insurance and retirement group, is similarly bullish about the RILA market’ s future.“ I don’ t believe RILAs are going away,” she says.“ Advisors and investors that have never utilized traditional variable annuities now utilize RILAs.”
To support that argument, Frank O’ Connor, vice president of research at the Insured Retirement Institute in Washington, D. C., highlights the growing number of retirees and near retirees, who together hold most of the nation’ s wealth.
“ Principal protection is extremely important to those who are fully retired or near retirement, but inflation is also a concern,” O’ Connor says.“ RILAs allow investors to participate in part of the gains if equity markets rise, potentially increasing their purchasing power in retirement, and also mitigate the impact of a major decline.”
He notes that RILA returns do not include dividends, which clients need to understand. Nevertheless, he foresees continued sales acceleration. It helps that the Securities and Exchange Commission recently finalized rules that eliminate barriers to entry into the RILA space.
Moreover, he adds, though RILAs’ quarterly sales growth exceeded that of all other annuity categories in the first half of 2025, the raw dollar amounts of total sales paled in comparison to the sales of other annuity varieties. For instance, sales of fixed-index annuities surpassed RILA sales by roughly $ 22 billion over that time, and traditional fixed-rate deferred annuities passed them by $ 47 billion.
“ There is certainly room for further growth,” he says.
48 | FINANCIAL ADVISOR MAGAZINE | SEPTEMBER 2025 WWW. FA-MAG. COM