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Annuities Anyone?

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There is an increasing amount of chatter about how to provide more investment income for boomers who are starting to retire, as well as for other investors who want more income, and there a number of traditional ways for advisors to help clients do that–including bonds, dividend-paying stocks, real estate rental property, and annuities. Annuities have been under the regulatory microscope lately, generating considerable controversy regarding proper disclosure of fees and expenses, and leading some firms to revamp how they use annuities and which ones they use. IA thought it would be interesting to ask advisors: “Do you use annuities in clients’ portfolios? If so, what type do you use most often?”

The results show that 40% of advisors who took the poll never use annuities of any kind in client portfolios. Of the advisors who do use annuities, the majority, 35%, uses variable annuities; 12% use equity-indexed annuities; and 8% use fixed annuities. Bond annuities are used by only 1% of advisors who responded, and 1% use no-load variable annuities, a relatively new entrant to the annuity field. No advisors taking this poll say they use immediate or deferred annuities.

Next, we thought it would be interesting to take the pulse of advisors on the issue of fees versus commissions. The new IA Poll, located on the home page of the IA Web site, is up today and asks: “In your practice, what percentage of income is derived from fees versus commissions?” We welcome and encourage your participation.


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