Written by: Rich Romano, CEO of FIDx
Every conversation about wealth management technology right now circles back to the same promise: AI and automation will make everything faster. Faster onboarding, faster paperwork, faster trades, and faster answers. The first wave of this transformation focused on the transaction itself, and digitizing as much paper as possible. Now the ambition is to go headless, with API-driven connectivity that promises to make everything simpler still. Faster and faster, the thinking goes, should lead to easier and easier. In most aspects of the advisor’s workflow, that promise is worth taking seriously. For an advisor, every minute counts, and every minute spent with a client is a minute well spent.
Annuities, however, are the exception to this rule.
Connecting brokerage, insurance, and advisory platforms has accelerated, enabling advisors to incorporate annuities into client portfolios without toggling between multiple systems. There is one part of the process, though, where speed can do serious damage: approval and suitability review.
The problem with “end-to-end” in today’s marketplace
“End-to-end” has become one of the most overused terms in insurtech marketing. Much of what gets marketed as end-to-end really means “end-to-end for the parts that are easy to automate”: pulling client data, populating a form, or routing a document for e-signature. Those are tangible efficiencies, but they are not the same thing as an end-to-end annuity transaction.
And even the perception that those parts are easy is misguided. Launching into an annuity workflow from a wealth platform can look different from one combination of platform and order-entry system to the next. If pulling client data into a form were really so easy, it would be as easy as buying a share of Apple. It isn’t.
Annuity workflows are fundamentally different from, and more complex than, a mutual fund trade or a model rebalance. Annuities are contracts, not just transactions. They carry surrender schedules, riders, income protection, and suitability obligations that vary by state and by product. When a firm treats that complexity as friction to be engineered away, it isn’t simplifying the process: it’s moving the risk downstream, usually onto the advisor’s desk, months or years later, in the form of a NIGO (Not-In-Good-Order) application, a compliance flag, or a client who didn’t fully understand what they bought.
Consider why. Mutual funds and ETFs move quickly because they sit on an incredibly strong foundation of reference data and rules. Apple is Apple no matter where you find it. Across Fidelity, Schwab, Pershing, or any of the major platforms, an advisor knows how to buy it and can be certain of what they bought, regardless of how they got there. That is the beauty of wealth management: you don’t see the complexity. Risk tolerance is risk tolerance, asset classes are asset classes, and while there may be slight variation from firm to firm, the experience is mostly uniform. Apple doesn’t vary by state. Annuities can, and the complexity runs deep.
Annuities offer nothing like that level of consistency. An advisor who changes firms is suddenly subject to how the new firm works with annuities: different systems, different processes, and sometimes no established process at all. They are starting from scratch. The industry has never converged on a single workflow for a carrier’s product; it varies by firm, by wealth platform, and by the systems connecting them. There are so many combinations that even AI, pointed at the transaction alone, cannot solve them all. That is why faster and easier ultimately lose to consistency, which the industry needs more than just about anything else, and why the answer cannot be another set of tools layered on top. The answer has to run deep.
A true end-to-end solution has to hold up under the parts of the process that are complex: matching product features to a client’s actual financial picture, applying the correct suitability standard for the state and the type of product, capturing the documentation that a carrier and a regulator will both accept, and doing all of this inside the advisor’s existing workflow rather than a separate portal that creates a second system of record. When evaluating a technology provider, ask what happens at the moments of friction, not when everything goes smoothly.
Solutions should be built around compliance, not the sale
There’s a meaningful design choice underneath every insurtech platform, and it shows up in what the system is optimized to do first. Some platforms are built around the sale: get the advisor to a signature as quickly as possible, with compliance treated as a checkpoint bolted on afterward. Others are built around the compliance side of the transaction from the start, with the sales workflow constructed on top of that foundation.
The difference matters. When suitability, documentation, and product logic are the foundation rather than an afterthought, the system can surface problems before they reach the carrier – flagging a mismatch between a client’s liquidity needs and a product’s surrender schedule, for instance –before the application is submitted. When compliance is bolted on, the system can only catch problems after the fact, which means the advisor absorbs the cost of fixing them: the callback, the amended form, and the client conversation nobody wanted to have.
It’s why the integration of suitability into the proposal itself has been a really big step forward. The reason mutual funds, SMAs, and other advisory products flow so smoothly is that suitability is addressed during planning and proposal, not later in the process. Annuities have to work the same way: if the industry wants a real place in wealth management, it has to feel and act like wealth management. There are a lot of great standalone tools for comparing products on suitability before making a recommendation, but a tool that sits outside the wealth platform can only carry the process so far. The analysis has to be embedded where the advisor already works.
Infrastructure built around compliance isn’t slower because it’s less capable. It’s often faster in every way that counts: fewer NIGOs, fewer resubmissions, and fewer surprises six months into the contract. NIGO rejections cannot be rectified for free; they cost both advisors and insurance carriers money and time. According to industry data, each NIGO rejection adds between three and seven business days per account for an advisor. Imagine what that looks like when an advisor’s book of business spans several hundred accounts! Furthermore, based on what we have heard within the industry, the remediation cost to insurance carriers can be up to $150 per case.
The 15-20-minute annuity versus the five-minute annuity
I’d rather see an advisor spend 15 to 20 minutes on an annuity transaction and get it right than spend five minutes and get it wrong. That’s a practical consideration, borne out in what happens after the application is submitted.
A five-minute process that skips a step, misreads a product feature, or gathers just enough information to get the form submitted doesn’t actually save 10 to 15 minutes. It defers them, usually with interest. Those minutes come back as a call from the carrier, a request for additional documentation, a compliance review, or worse, a client who calls 18 months later confused about why their income rider works the way it does.
A 15-to-20-minute process that captures the right information the first time, applies the correct suitability framework, and produces documentation a carrier can approve without back-and-forth isn’t slow. It’s complete. Completeness, in a product category built on long-term protection, is the actual measure of efficiency, not how quickly a form gets submitted.
Laying the foundation
None of this is an argument against AI and automation in annuity distribution. Do we think AI is going to do something meaningful in this industry? Probably. But we do think much of the industry is focused on the wrong thing. It’s an argument for ensuring AI-driven automation doesn’t take over the riskiest and most important parts of annuity transactions.
The industry should use technology to reduce the manual work in gathering client information, checking product fit, and routing documentation. What it shouldn’t do is let the appeal of speed override the actual purpose of the process, which is to make sure a client ends up in a product that aligns with their needs and that the paperwork behind it is accurate and will hold up.
It comes down to the mission for which you deploy AI. If you focus AI on making the transaction faster, bravo, but ask what has actually changed. Have you reduced the carrier’s burden in form administration? Have you reduced the time and resources needed at the distribution home office? The industry has complicated some big workflows for itself, and forms are the prime example: multiply them across every product and every carrier, and the complexity becomes enormous. Each carrier has teams of people doing nothing but administering forms.
Send AI on a mission to eliminate that burden, and imagine giving a carrier back 70 percent of its form process. That is a mission worth flying. But the mission can’t be myopically focused on any one piece. AI needs the expertise of the industry to guide it to what is most important: what the advisor sees and experiences, and the seven layers underneath that they will never see but that matter just as much.
When considering insurtech platforms, advisors should look for infrastructure that treats annuities with the seriousness the products deserve, not a shortcut dressed up as a solution. The firms that win in the next phase of this industry won’t be the ones that shaved the most minutes off the process. They’ll be the ones that built the strongest foundation underneath it.
