FINRA Steps Up Scrutiny of Variable Annuities Over Broker Incentive Conflicts

FINRA made variable annuity recommendations a 2024 examination priority, targeting a structural conflict: brokers earn 5–8% upfront commissions on sales, creating incentives to recommend the product regardless of client suitability. The regulator's heightened enforcement signals that disclosure alone no longer satisfies best-interest obligations. Documentation and supervisory review are now mandatory to justify any recommendation.