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August 01, 2008 at 04:00 AM
A survey commissioned by Ameritas Advisor Services and conducted by Spectrem Group this spring found that while advisors are justifiably concerned with providing income to clients during retirement, they also tend to shy away from annuities. The debate about annuities–an asset class that for many years has had more negative headlines associated with it than positive ones–is an ongoing one, wrote Savita Iyer in IA’s June Retirement Planning e-newsletter, and even if there has been a sea change in these instruments (particularly with respect to their transparency), there’s a lag in some advisors using the products. This is normal, says Mitchell Politzer, president and CEO of First Ameritas Life Insurance Corp. of New York, since “most advisors formed their beliefs when annuities didn’t have the features they have now.”
Editorial Director Jamie Green caught up with Politzer to discuss the survey’s findings and the broader issues of advisors during an al fresco lunch in Chicago in late June.
What are the main forces of change these days for advisors and the regulatory world they live in?
How will the world evolve? What are the catalysts for change? Will there be more or less regulation? More. Will there be more or less transparency? More. Will there be more or less silo regulation of insurance and securities? Less. These will be the environmental factors, plus the need for retirement income, that will be the catalysts for change.
And what about the skills that advisors will need for working with people nearing retirement or already in retirement? Do they have them?
People consolidate relationships–from about six while they’re in the working world to two [in retirement]. That relationship with the intermediary moves away from the products to a more holistic relationship.
But what’s the added value that the intermediary brings? It’s the knowledge, the planning component, not the delivery of the product. Retirement income planning is not a do-it-yourself job; the stakes are too high.
