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Maximizing Returns and Mitigating Risk: Unlocking the Advantages of RILAs

Brendon Kelly   |   April 2024   |   4-minute read
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In today's dynamic financial landscape, advisors and investment professionals are continually seeking innovative solutions to help clients achieve their retirement goals while managing risk effectively. One such solution gaining traction is Registered Index-Linked Annuities (RILAs). With their unique combination of features, RILAs offer a compelling proposition for clients seeking growth potential with downside protection. We’re highlighting five key advantages of RILAs and exploring the top sales strategies to help advisors effectively communicate the benefits to their clients.

Unlocking the Advantages of RILAs

Imagine a financial product that combines the growth potential of equities with the stability of bonds. That's precisely what RILAs offer.

With higher cap rates and participation rates compared to traditional fixed indexed annuities (FIAs), RILAs provide clients with an opportunity to capture more of the upside potential of the market while still enjoying downside protection through floors or buffers.

1. Superior Cap Rates & Participation Rates vs. FIAs

RILAs typically offer higher cap rates or participation rates compared to traditional FIAs, providing clients with enhanced growth potential. These higher rates enable clients to capture more of the upside potential of the market, making RILAs an attractive option for those seeking competitive returns.

2. Risk Mitigation with Floors or Buffers

One of the most appealing features of RILAs is their ability to provide limited downside market protection while still allowing for market participation. Utilizing floors or buffers, RILAs aim to mitigate the impact of market downturns, providing clients with a measure of protection and stability in volatile market conditions, although it's important to note that there is still some inherent risk involved.

3. Tax-Deferred Growth vs. Traditional Securities

RILAs offer tax-deferred growth, allowing clients to accumulate wealth more efficiently compared to traditional securities such as notes, equities or bonds. By deferring taxes until withdrawals are made, clients can maximize the compounding effect of their investments, ultimately leading to greater long-term wealth accumulation.

4. Probate-Free Benefits

Similar to other annuity products, RILAs offer probate-free benefits, ensuring a seamless transfer of assets to beneficiaries upon the client's passing. This feature simplifies estate planning and provides heirs with expedited access to the funds, minimizing administrative hassles during a challenging time.

5. Indices vs. Traditional FIAs

RILAs provide clients with a broader range of index choices compared to traditional FIAs, allowing for greater customization and diversification within their investment strategy. Additionally, clients have the flexibility to change indices at each anniversary date, all while enjoying tax-deferred growth, enhancing their ability to adapt to evolving market conditions.

Strategies for Effective Sales Positioning

Positioning RILAs as a bond alternative can resonate with clients seeking income generation and capital preservation. By showcasing how RILAs offer equity-linked returns with the stability of bonds, advisors can appeal to clients looking to diversify their portfolios while minimizing risk.

Integrating RILAs into a client's investment mix can increase the likelihood of positive returns compared to a traditional 60/40 portfolio. Utilizing tools like JourneyGuide can demonstrate higher probabilities of success and better income outcomes, reinforcing the value of RILAs in optimizing retirement outcomes.

For clients with qualified accounts, transferring risk by reallocating gains from IRAs to RILA Rollover IRAs presents a compelling opportunity. This strategy allows clients to capture gains within their current IRA while still participating in market returns through RILAs, effectively enhancing retirement security.

RILAs offer a versatile solution for retirement planning, combining growth potential with downside protection and tax advantages.

By understanding and effectively communicating the advantages of RILAs, advisors and investment professionals can empower their clients to navigate retirement with confidence and security.

As you explore the possibilities of integrating RILAs into your clients' portfolios, consider the unique benefits they offer and how they can align with your clients' long-term financial goals. To explore how RILAs can strengthen your clients' retirement strategies, and to discover the comprehensive support and expertise offered by Ash Brokerage, contact us today for personalized guidance and assistance.


Ash Brokerage is not an investment adviser and the information provided in this document is not investment advice. You should consult your investment professional for advice based on your personal circumstances and financial situation. Annuities are intended to be long-term investments and may not be suitable for all investors. Withdrawals from an annuity contract may have tax consequences. An annuity is a long-term investment designed for retirement purposes. With a RILA, there is a risk of loss of principal if negative index returns exceed the selected protection level. Gains or losses are assessed at the end of each term. With a registered annuity, investment returns and the principal value of an investment will fluctuate so that an investor's units, when redeemed, may be worth more or less than the original investment.

Registered index-linked annuities (RILAs) are sold by prospectus only. Before purchasing an annuity, you should consider the features of the contract, applicable investment options, index strategies, and investment objectives as well as the risks, charges, and expenses associated with the annuity and its investment options. The prospectus contains this and other information, which should be read carefully before investing. To request a prospectus, call Ash Brokerage at (800) 589-3000. Annuity guarantees are subject to the financial strength and claims-paying ability of the issuing insurance company.

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About the Author

Retirement is one of the most important financial events in a person’s life. As SVP, Retirement, Brendon Kelley facilitates our team to make planning for retirement as straightforward as possible. From having the initial conversation to handling licensing and submitting applications, Brendon’s committed to keeping the annuity process running smoothly.