How I Beat Fidelity’s Annuity Quotes

Over the years I’ve heard all sorts of different claims.  Sales situations become competitive and lots of agents and advisors will say anything to make the sale.  It gets harder for people like that over time because you as the consumer have no excuse for believing the inconsistent information.  There are several resources available, including this one, to help you figure things out and distinguish between fact and fiction.  Taking a little time in this process should be expected for everyone when there is typically a large sum of money at stake.

Misinformation in the business was the main catalyst for me starting this project long ago.  I found something useful or a different way to look at certain opportunities and had to share the news.  This was the best way to do it and it also prepared me for answering questions without having to look up any information.  Some of the lies told can do real damage and some of them are harmless.  I usually think it’s funny unless an unfortunate consumer runs into hardship because of it.  Today we have a case of the former and it comes from Fidelity which has been a really good topic over the past few years.

I have a series of episodes going back to late 2023 about Fidelity changing its tactics and promoting annuities for retirement plans.  I have some inside information from a client who has a 401(k) managed by Fidelity.  He would send me the monthly newsletters and annuities slowly climbed the list to come very near the top of the articles recommended.  Apparently it has not been a big part of the company’s information recently but that doesn’t mean they aren’t still selling annuities.  The fact is that Fidelity always sold annuities but only recently admitted publicly that it’s a good option.

When I see a Fidelity recommendation it is most often a single premium immediate annuity or a deferred income annuity (SPIA or DIA).  If you need a refresher there are a couple of podcast links below.  I can usually beat the payouts that you see from Fidelity and in many cases by a large margin.  Because it’s a big company and they are slightly limited by existing corporate relationships.  For what it’s worth they will always represent extremely high quality options so I’m not trying to take anything away from them.  The annuity business is extremely competitive between insurance companies so a broker who has the most flexibility will be more able to move around and help you find the best payouts.

A few weeks ago I ran into one of these.  One guy wanted some deferred income and Fidelity gave him a quote.  I ran the same numbers and was able to deliver much more income for the same price.  As is typical, the guy was confused and I don’t expect everyone to know how this business works.  He went back to talk to the Fidelity agent and asked him why they weren’t able to sell the same thing.  The agent responded with a little white lie and said, “we don’t sell those because they have fees.”  A company built on a fee model for asset management doesn’t sell annuities with a fee?  That is laughable at best and untrue as well.  It’s not at all the reason why Fidelity doesn’t sell them.

Any type of annuity fee needs to be justified in order for you to pay it.  Whether providing some sort of market protection, guaranteed income, or death benefit, a fee should match the benefit you want.  In the case I’m talking about today, the fee is appropriate because it is added to a product that pays much more income.  That makes the fee worth paying because it gives the contract owner more money.  We like more money.

Anyone can make a quick search and figure out that Fidelity has been selling variable annuities for a long time.  Some of those will even have income riders and whatever combination of benefits in a variable annuity, you will see the highest fees of any financial product.  The agent’s comment about my recommendation amounts to a sheepish attempt to open a new conversation.  Fidelity Investments is all about the fee.  They don’t sell indexed annuities with a guaranteed income rider because they don’t have the right corporate agreements in place.  That’s just not as good a sound bite as the previous objection.  I expect this will change at some point and it will only benefit consumers more.  

Everything has changed in the past few years.  Major investment firms who once criticized annuities are now bringing the guaranteed income options to the forefront of portfolio management discussions.  The advantage was always there but now it’s too large of a benefit to ignore.  This should serve as a reminder for anyone who is told that annuities are not a good deal.  Anyone who says that is living in the past.  Fidelity may open up the number of options they have but until then you can always come here if you want the best deal.

Have a great weekend!

Bryan

Watch Episode 203: How I Beat Fidelity’s Annuity Quotes

Download Episode 203: How I Beat Fidelity’s Annuity Quotes on Apple Podcast

Last Updated on November 15, 2025 by Bryan Anderson