Brokers Sell More VAs, Study Finds

IPAs comprise a household’s liquid assets, including checking and savings accounts, certificates of deposit, retirement accounts, mutual funds and securities.

The average IPA of those purchasing VAs through a broker was $416,000, compared to $363,000 for those buying through the insurance company channel and $328,000 for those buying through a bank, Claritas found.

“Surprisingly, those who bought through an insurance company were most likely to own a small business,” says Julie Simard, author of the study.

Of those who purchased through an insurance company, 16.5% were business owners, compared to 14.7% of those who bought through a broker and 10.3% of those who bought through a bank, she reports.

“This may be due to cross-selling by the insurance company after businessowners purchase insurance for their small businesses,” Simard believes.

She also thinks the data reflect the approaching retirement of baby boomers, the oldest of whom are nearly 60.

“That group is more likely to have a broker than other age groups,” says Simard. “Those who purchase through an insurance company tended to be less affluent. They also tended to be older. So wealth and age are drivers influencing which channel they choose.”

The overall conclusion, she says, “is that investors who tend to be older and less affluent tend to rely on their bank for annuity purchases, compared to younger and more wealthy investors, who prefer to purchase annuities through a broker.”

Claritas says its analysis was based on data from over 175,000 interviews.