One of the biggest issues for the VA industry right now is to expand its market, and the best way to do that may be to enlist advisors who don’t now sell the products, a panel of asset managers agreed during the NAVA meeting here.
Most of the recent growth in VA assets was due to market increases, not new net assets, noted Steve Scanlon, managing director for AllianceBernstein’s subadvisory services, New York, a unit of AXA S.A., Paris. One reason: a scarcity of advisors who are willing to sell VAs, he said.
Scanlon, a member of NAVA’s asset managers leadership committee, spearheaded a study of how to expand VA sales by recruiting new producers. The study interviewed advisors who currently do not sell VAs.
Another committee member, Andrew Wilmot, senior vice president, Neuberger Berman Management, reported 95% of advisors in the study had sold mutual funds in the previous 12 months, while 85% had sold stocks or bonds; 71% had sold 529 college education plans and 52% had sold separately managed accounts.
But none had sold an investment vehicle that guaranteed retirement income, such as a VA. Wilmot called that result “perplexing” in view of the finding that 95% focus on retirement planning in their work, while the same percentage also focus on income planning.
Another bewildering finding was that among advisors interested in training, 77% wanted income-planning education, yet only 19% were interested in training about insurance products, Wilmot said.
That lack of a connection between insurance and income planning suggests the industry needs to do better at positioning its products in the minds of advisors, he argued.
“We need to explain how these products work and how they complement what they already sell,” he said.
When interviewers discussed guaranteed income products with advisors but did not specifically mention either VAs or insurance, 39% of advisors said they were “very interested” in discussing such a product with a professional, while another 26% showed a “strong” interest, and 21% a “moderate” interest. Only 14% were not at all interested in such discussions, Wilmot revealed.