Each time a client inquired about variable annuities, the no-load fund company offered up the software. After about six months, when T. Rowe Price followed up with market research to see why some investors had bought variable annuities while others hadn't, it discovered the software had done its job too well. It was the No. 1 reason why people said they had decided not to buy an annuity, says Steve Norwitz, a T. Rowe Price vice president. See a table of annuity funds' average performance and fees. Nevertheless, many companies are finding value in providing more data to potential clients.
Variable annuities are mutual funds wrapped in a tax-deferred wrapper.
Their appeal is that earnings are tax-deferred. But they are generally viewed by investors as more complicated than other investments, and thus frequently require more explanation and hand-holding. This is where technology can help the provider and investor alike. An unprecedented amount of information is available at the click of a mouse, and more is coming. Many insurance and financial companies now have Web sites.