What factor could lead to a potential mismatch in annuity suitability?

In the context of annuity suitability, a potential mismatch can occur when the client's financial goals do not align with the nature of the annuity product being considered. Annuities are generally designed as long-term investment vehicles, typically suited for retirement planning. Therefore, if a client has short-term financial goals, such as saving for a vacation or buying a new car within a few years, investing in an annuity could lead to a mismatch.

Annuities often impose penalties for early withdrawals, and their benefits typically accrue over a longer period, making them less suitable for short-term objectives. This could result in a situation where the client may not be able to access their money when needed without incurring fees or suffering opportunity costs. Consequently, aligning the type of financial product with the client’s investment timeline is crucial for their financial success and satisfaction.