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Cogent: No Retirement Income Product Leader

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Cogent Research has found that no single retirement income product leader has as yet emerged among affluent retirees and pre-retirees.

Today’s affluent pre-retirees and retirees are most interested in managing retirement income through traditional certificate of deposit or bond-laddering strategies implemented by themselves or through advisors, says the Cambridge, Mass. researcher in a new report on this market.

Variable annuities rank second in familiarity and interest, while target payout and absolute return funds earn little interest, they continue.

High expectations among retirees and pre-retirees are a factor in this finding, according to Cogent Principal Christy White. “In theory, pre-retirees love the idea of a guaranteed paycheck, but in reality they are unwilling to give up control of their principal for too long–and certainly not forever.”

The researchers also found that retirees and pre-retirees are indecisive regarding which firm is the “best” among retirement income providers. For instance:

- No one firm was chosen by more than 10% of survey respondents, with the largest percentage of respondents saying they “don’t know” (26%).

- When naming the company they would be most likely to consider when purchasing a retirement income product, they cited more than 30 firms, with no single firm earning more than 10% of the vote and well-known brands being cited by 5% or less.

“While this level of confusion and indecision around retirement income products and providers is no doubt disheartening to providers, it’s also an exciting opportunity for the firm or firms that eventually get it right,” says Carrie Merrick, project director at Cogent Research, and author of the study.


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