The Retirement Management Analyst designation which I hold teaches a philosophy called "first build a floor". This means building a floor of guaranteed income in retirement; a broad definition of flooring would be stable sources of income that are not dependent on stock market returns.
Personally, I believe an advisor has an obligation to inform clients about all the non-product choices they can use to establish a floor before they try to sell them something.
Once a plan has been created that utilizes non-product options for flooring, then products such as annuities can be considered.
If it is deemed an annuity solution is a proper solution, then the question becomes, what kind of annuity, and which account do we buy it in? (Learn more about annuities in Should You Buy an Annuity.)
We recently ran just such a case for a client. They will have no sources of guaranteed income in retirement outside of their Social Security benefits. We think an additional source of guaranteed income is appropriate in their situation. They wanted to use $100,000 in a CD to buy an annuity.
After looking the tax impact of that decision, we decided that wasn't the right thing to do. Instead, we think $100,000 of the husband's IRA should be used to buy the annuity or annuity-like solution (What do I mean by annuity-like solution? More to come on that in the next few days).
Sometimes you can have the answer right (such as I need guaranteed income) but still implement it in an inefficient way by buying the product in an account that will lead to less than favorable tax treatment when viewed as part of your overall retirement income plan.
The solution: don't buy stuff unless it's part of a plan. I have no problem with people who sell annuities, but rarely do I see the recommendation made as part of a thorough plan, and that is something I do have a problem with.