Annuities serve an important function in many investors' portfolios even though they can get bad press because of the fees associated with some features.

Now the Department of Labor (DOL) has issued its ruling requiring financial advisors to act as fiduciaries when working with a client and their retirement assets. If high fees make annuities a target, what’s it likely the insurance industry will do about annuities?

“Adapt and survive” has been the unofficial motto of the British upper class for years. It’s likely the insurance industry will take a page from their playbook.

What’s the insurance industry’s likely next step?

The DOL rule puts financial advisors in the position of needing to recommend the most cost-effective solutions for clients consistent with their risk tolerance. It’s logical they won’t say “take your money out of our firm,” so the range of solutions would include all the offerings they have in-house or through partner firms.

It's logical firms will standardize pricing across their platforms. It should lessen the legal liability for recommending the most cost-effective solution if everything on offer costs the same. This might be a 1 percent fee on assets under management.

Read more from the Milwaukee Business Journal.