Apparently shaking off the bad publicity from a series of state and federal investigations into variable annuity sales, brokers and other investment professionals increased their share of the VA market last year, a new study finds.

Brokers’ share of VA sales grew to 57% in 2004 from 52% in 2003, according to the Market Audit, a survey of household financial behavior by Integras, a division of market research firm Claritas Inc., San Diego.

At the same time, VA purchases made through insurance companies fell from 30% to 25%.

The survey found no significant change in VAs sold through banks, which accounted for 15% of sales.

The analysis also showed that age, wealth and small-business ownership appear to be factors influencing annuity channel preferences.

For instance, the mean ages of those buying VAs through the various channels were:

o Through an insurance company: 59

o Through a broker: 60.5

o Through a bank : 65

Corporate Insights also found annuity holders with the highest levels of income- producing assets were the most likely to buy through a broker, while those with lower average IPAs were more likely to purchase through a bank.

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.