A popular vehicle for saving for retirement is the variable annuity. An agent explaining the benefits of this product would probably be in violation of the NASAA Statement of Policy on Dishonest and Unethical Business Practices of Broker/Dealers and Agents if she claimed that variable annuities offer:
A) lower overall expenses than a mutual fund with similar investment objectives.
B) tax deferral on earnings until withdrawn from the account.
C) the choice of a large number different sub-accounts with varying objectives.
D) the ability to transfer funds between sub-accounts without incurring a tax liability under IRS Code section 1035.
Answer: A) lower overall expenses than a mutual fund with similar investment objectives.