Pacific Advisory Variable Annuity review

Yes, for the right buyer and the right advisor relationship. This is a good annuity for someone who has already maxed out other tax-deferred vehicles, works with a fee-based advisor, and wants market participation inside a tax-deferred wrapper without the penalty structure of a traditional commission-based VA. It is less appealing for someone who wants principal protection, a fixed or indexed crediting option, or who does not have a long enough time horizon to benefit from the tax-deferral advantage.

The main reason to buy Pacific Advisory is tax-deferred growth with full market access and no surrender period. For a high-income investor who has maxed out 401(k) and IRA contributions and does not want to create taxable events while managing their portfolio, this product gives them a way to continue accumulating on a tax-deferred basis. The secondary reason is the advisory-fee-friendly billing structure, which lets advisors charge their fees directly against the contract without triggering a taxable event or reducing optional benefit values — up to 1.50% of account value annually.

I think Pacific Advisory is best for a high-earner working with a fee-based advisor who wants to allocate additional after-tax dollars to a tax-deferred investment wrapper, values full liquidity, and wants a broad menu of institutional-quality funds without paying for features they do not need. It is less attractive for someone who wants principal protection, prefers a fixed or indexed annuity, or whose advisor operates on a commission model. It is also not a fit for someone who needs short-term access to their money in a way that the market might disrupt.

You are buying a tax-deferred investment account with insurance wrapping. Unlike a fixed or fixed indexed annuity, there is no floor here. Account value fluctuates directly with the subaccounts you choose. What the annuity adds is the tax-deferred treatment of gains, the ability for an advisor to rebalance and reallocate within the contract without triggering taxes, and access to an optional income guarantee or enhanced death benefit if the owner chooses to add one. The insurance layer is present but it is not the core of why most buyers choose this product.

Pacific Advisory operates as a straightforward variable annuity: you allocate your premium across 116 variable subaccounts covering the full spectrum from conservative fixed-income options to aggressive equity and sector funds. You can move money between subaccounts up to 25 times per calendar year without triggering a taxable event. Portfolio rebalancing is available on quarterly, semiannual, or annual schedules. Dollar cost averaging is also available for systematic allocations across subaccounts.

The 0.45% base cost is deducted daily from subaccount assets and covers the mortality and expense risk charge (0.30%) and the investment platform fee (0.15%). There are no commission charges. The M&E charge scales down for larger accounts: 0.10% if account value is $500,000–$999,999, and 0.05% for $1,000,000 or more, at issue or on the most recent quarterly anniversary.

The most meaningful secondary feature is the advisory-fee-friendly billing structure. Pacific Advisory is designed specifically to allow a fee-based advisor to bill their advisory fee directly against the contract's nonqualified assets without that fee withdrawal being treated as a taxable distribution. This matters practically: in most investment accounts, when an advisor pulls their fee, you may incur a taxable event. Here, fees up to 1.50% of account value annually are carved out from that treatment, which makes the economics of running a variable annuity inside an advisory relationship cleaner.

The optional Portfolio Income Protector rider is also worth noting as a meaningful add-on for someone who eventually wants to convert this accumulation vehicle into a lifetime income source. But it is worth being direct: electing the income rider restricts you to a list of conservative to balanced investment options only. So if you buy this product for growth-oriented market exposure and then decide you want the income guarantee, you will need to accept a more constrained investment menu going forward.

There are no surrender charges on Pacific Advisory. That is one of its defining features and a meaningful advantage for buyers in this channel. You can withdraw any portion of your account value at any time. Withdrawals are subject to ordinary income tax on the gain portion, and withdrawals before age 59½ may also trigger a 10% federal tax penalty on taxable amounts.

One practical note: if you elect the Portfolio Income Protector rider and take a withdrawal before the younger designated life reaches age 59.5, it will reduce the benefit base proportionately or dollar-for-dollar, whichever produces a lower benefit base. Excess withdrawals after income commencement are also treated pro-rata against the benefit base. So full contract liquidity and rider protection do not always move in the same direction.

The base cost of the contract is 0.45% annually, which is low for a variable annuity. On top of that, each subaccount carries its own expense ratio, ranging from 0.03% to 1.00% net. The cheapest options are passive index funds; the most expensive are actively managed specialty funds. A buyer who sticks to low-cost index subaccounts can keep total all-in costs under 0.60% or so, which is genuinely competitive.

If you add the optional income rider, you pay 1.25% for single life or 1.35% for joint life on top of the base contract cost. If you add the enhanced death benefit rider, you pay another 0.15%. So total costs can range from roughly 0.48% for the most cost-conscious index-heavy approach up to 1.85% or more for an income-rider plus enhanced-death-benefit configuration using higher-cost funds.

The real tradeoff is not fees — it is the nature of the product. This is a variable annuity. Account value can and does go down when markets fall. Buyers who need principal protection should look elsewhere.

Pacific Advisory Variable Annuity is issued by Pacific Life & Annuity Company, a subsidiary of Pacific Life Insurance Company. Pacific Life & Annuity Company is the entity authorized to issue contracts in New York — Pacific Life Insurance Company, the larger national entity, does not issue in New York. This matters for advisors and clients in New York because Pacific Life & Annuity Company is the specific issuer on their contract; the separate national filing under Pacific Life Insurance Company covers all other states. Both entities are part of the same Pacific Life organization, which has operated for more than 150 years under a mutual holding company structure — meaning it operates for the benefit of policyholders and contract owners rather than stockholders. Pacific Life & Annuity Company carries an A+ rating from A.M. Best and an AA- from Standard and Poor's, and has received multiple DALBAR Service Awards since 1997. Pacific Life was also designated a 2025 World's Most Ethical Company by the Ethisphere Institute.