From the October 2008 issue of Research Magazine • Subscribe!

October 1, 2008

How Prepared Are You?

A recent survey of registered investment advisors by Spectrem Group of Chicago for Ameritas Advisor Services found that although 63 percent of advisors expect retirement income planning to be a huge part of their business in the years ahead, more than half do not have specialized investment options readily available for clients seeking retirement planning advice.

Additionally, the Spectrem study found that advisors are rarely offering annuities as part of their retirement-planning strategy, despite the product's ability to help address some issues today's investors face: increased longevity, inflation, and market and investment volatility.

Mitch Politzer, senior vice president of Ameritas Advisor Services, attributes this "annuity aversion" to a number of possible "misconceptions" concerning withdrawal charges, expenses, licensing requirements and loss of investment control for investors and advisors alike.

"When advisors were in their formative and learning years, they came to some opinions with respect to annuities that were well-founded at the time: that they were expensive, not flexible, it did have tax deferral in the accumulation years but it was a way of converting capital gains into simple income," says Politzer. "As well, there is a complexity to annuities and licensing. "

As Politzer notes, the products have changed and become much more flexible and consumer-friendly in recent years.

"Our hope is that this report will encourage advisors to assess their current retirement-planning strategies so they can obtain the support needed to help investors stretch their income well into their post-retirement years," he concludes.

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