Life insurers may want to take a closer look at their annuity offerings. The 2008 financial crisis has changed a lot of financial advisors’ minds about insured retirement solutions, namely variable annuities, according to a new survey by AllianceBernstein L.P. and the Insured Retirement Institute (IRI).
The study, unveiled today at the IRI Marketing Summit, indicates that as advisors view VAs as protection against a possible repeat of the financial crisis. In fact, half of the respondents said they started recommending VAs more because their clients are demanding "guaranteed investments," and 42 percent bring up VAs in "every conversation" with clients.
"The fact that fewer people today feel confident that they will be able to meet their financial needs in retirement is driving a robust market for lifetime income solutions," said IRI President and CEO Cathy Weatherford. "Our survey found that more and more financial advisors are turning to VAs as a sound portfolio solution because they provide guaranteed income and can help clients attain financial security in retirement."
The survey of more than 500 advisors consisted of 34 questions about practices, client demographics, asset allocation of investment portfolios, strategies for managing retirement income, risk and, ultimately, variable annuity sales.
Sixty percent of the advisors selling more than 10 contracts per year have increased their recommendations for VAs since the credit crisis, according to the survey.
"Clients clearly have a strong appetite for the benefits of variable annuities, and it is important that the industry better communicate how they can become a key portfolio ingredient," said Michael Hart, Managing Director of Insurance Services at AllianceBernstein. "We found that the more educated advisors are, the more likely they are to use variable annuities in client portfolios, and not surprisingly, the happier the client."
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access