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SIE: Investment Companies & Packaged Products
SIE practice questionhardVariable Annuities - Fees

Variable annuities typically include which of the following cost structures?

  1. AFixed guaranteed fees only
  2. BOnly back-end sales loads
  3. CNo charges beyond fund NAV
  4. DMortality and expense risk charges, administrative fees, and fund management fees✓ Correct answer
Explanation

Why DMortality and expense risk charges, administrative fees, and fund management fees

Variable annuities charge for insurance risks and administration, in addition to underlying fund costs. B, C, and D underestimate or mischaracterize the fee structure.

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