Beyond MYGAs: Fee-based indexed solutions for protected growth

February 5, 2026
Estimated reading time: 8 minutes

• Multi-year guaranteed annuities (MYGAs) and fixed index annuities (FIAs) are effective protected-growth tools in managed portfolios. Today’s products are commission-free and designed for fiduciary models, providing advisors with an expanded range of solutions to help meet a variety of client needs.

• MYGAs offer a fixed, predetermined rate of interest with full principal protection, making them a strong fit for clients who prioritize guaranteed outcomes.^††

• FIAs provide the same full principal protection as MYGAs but with index-linked upside potential, giving advisors a solution to offer clients who seek higher return potential without direct market risk.

• Having both MYGAs and FIAs in their toolkit gives advisors the flexibility to tailor protected-growth strategies to different client needs and objectives.

In this article, we explore the core features, benefits, and differences to help you determine which solution best supports your clients’ holistic financial plans.

For many advisors, MYGAs are a straightforward tool for delivering fully-protected, guaranteed growth.^†† They provide a fixed interest rate for a set term, and that rate is locked in at the time of purchase. Advisors can deliver returns with complete downside protection and no surprises along the way.

But when rates move lower, MYGAs may lose their attractiveness to clients accustomed to a certain level of yield.

Fortunately, FIAs offer another compelling option to fill that void.

FIAs take a different approach to delivering protected growth. Instead of a fixed interest rate, these products use a rules-based formula to determine interest credits linked to the performance of a chosen market index, such as the S&P 500. Clients are not invested in the market itself. Instead, the annuity simply tracks the selected index to calculate potential upside.

When the index rises, the client will earn interest up to a cap or participation rate in exchange for complete downside protection. For example, if the client selects a FIA with a 10% cap and the chosen index rises 12% for the year, the annuity would credit the full 10%. If the index declines, the credit drops to zero, but will never be negative or cause the client to incur a loss. That means the client’s principal, along with any interest previously credited, remains protected regardless of market downturns.

The client benefits from the strong index performance up to the cap, and their principal — along with all previously credited interest — remains protected even if the market declines in later years.

This structure gives FIAs an advantage in environments where fixed rates are trending lower. Because their performance is tied to an index performance rather than prevailing interest rates, FIAs offer clients who are looking to maintain stability more attractive growth potential with reduced market risk. 

While MYGAs and FIAs both offer full principal protection, they support different objectives within a client’s portfolio. Today’s commission-free products are designed to align with fiduciary models, providing advisors with an expanded range of solutions to help meet a variety of client needs.

This material provides a brief summary of product types and features, including a high-level overview of risks and potential benefits. This is not intended to provide full details of each product. It is provided for informational purposes only. The information provided is not intended as financial, investment, tax, or legal advice and should not be relied upon as such.

1. Transitioning clients from a maturing MYGA in a shifting rate environment

An advisor has a client whose MYGA is reaching the end of its term. The original rate was strong, but renewal rates are lower. The client still wants protection, but is hesitant to lock in a new MYGA at the reduced rate. The advisor reviews options and introduces an FIA as the next step, offering the potential for greater returns than the current fixed-rate alternatives. This lets the client continue pursuing growth while keeping their principal fully protected. 

2. Helping clients mitigate sequence of return risk

A client in or nearing retirement wants to reduce exposure to volatility but doesn’t want to move entirely into fixed-rate products. Their advisor uses an FIA to protect the principal while opening the door to index-linked upside. The combination provides the client with a greater sense of security and a more balanced portfolio that preserves upside potential while reducing market risk.

3. Balancing growth and protection for risk averse clients

An advisor has a client who has strong, negative reactions to portfolio drawdowns and holds excess cash due to volatility concerns. Recognizing that the client still requires accumulation to meet their long-term financial objectives, the advisor transitions a portion of the cash reserve into an FIA. This addresses the client’s loss aversion with full principal protection while offering the upside potential necessary to help keep their retirement plan on track.

4. Supporting clients with a holistic and adaptable retirement plan

As part of a protected-growth strategy, the advisor allocates a portion of assets to an FIA where the earnings are fully tax-deferred. If the client later decides lifetime income is important, the FIA can be paired with an optional lifetime income benefit for an added fee. This gives the advisor flexibility to adapt the strategy as the client’s financial needs evolve.

5. Enhancing tax efficiency for clients

A client in a high tax bracket wants to keep risk low but their advisor is mindful of the tax drag from the fixed-income sleeve. The advisor introduces an FIA as a way to maintain full principal protection while shifting growth into a tax-deferred wrapper. The client benefits from the ability to compound gains without annual taxation until retirement, when they might be in a lower tax bracket.^{^^}

Advisors who already use MYGAs often find that FIAs fit easily into the same type of discussions with clients. The key is framing FIAs as a complementary tool in the portfolio. Clients understand protection. They understand stability. FIAs simply offer an alternative way to pursue growth without taking on direct market risk.

Many advisors start by highlighting what stays the same: 

• Principal remains protected

• Accumulation-focused strategy

• Supports long-term stability

Then they introduce what is different: FIAs are linked to index performance rather than a single fixed rate, offering higher return potential while mitigating sequence of return risk. 

This approach reinforces continuity for the client while giving the advisor more flexibility to tailor solutions to their clients' holistic financial plans.

Protected-growth strategies work best when advisors have tools that can adapt to changing conditions. MYGAs provide guaranteed returns at fixed rates. FIAs help maintain protection and keep growth potential open when rates move lower. Using both gives advisors more ways to support client goals, particularly during times of market volatility.

The Flourish Annuities^∫ team is your firm’s dedicated annuity partner. Our licensed Annuities Specialists can help evaluate client needs, review existing contracts, compare solutions, and identify opportunities that might better align with your clients’ financial goals. To learn more, connect with our team of licensed experts: annuities@flourish.com.