LIMRA has just released a new study claiming the majority of financial advisors feel that guaranteed income products are “too complicated” and they want better tools and support from wholesalers and companies to help them explain the products to their clients.
“The advisors we talked to expressed a desire for simpler, more transparent products that they could understand and explain to their clients,” said Matthew Drinkwater, associate managing director, LIMRA Retirement Research. “They welcomed education and training to learn more about holistic retirement planning but nor for the expressed purpose of obtaining another designation. While they don’t want to be sold to, they were interested in learning how certain products could address the issues facing their clients.”
LIMRA’s study – Retirement Income Planning: What Really Happens With Advisors – said 56% of advisors surveyed said they expect retirement income planning to increase within the next year, and advisors who participated in focus groups in February say there is now a greater emphasis on financial planning as more of their clients are nearing or entering retirement. Spurred by the economic downturn, clients fear they will not have enough money to last throughout their lifetime and are requesting retirement income planning.
The study went on to reveal that independent financial advisors are increasingly using guaranteed income products with their clients.
Annuity product designers are apparently reacting to the call for easier-to-understand products.
At a recent industry conference, Robert DeChellis, president and CEO of Allianz Life Financial Services, and New York Life executive vice president of retirement income security Christopher Blunt agreed that the industry is responding to feedback from consumers and advisors that annuity products need to be simpler, and with lower fees. In a published report Blunt predicted there will be “simplicity by design” in new annuity products that will be much easier for advisors to explain and clients to understand.
While a development like this really doesn’t equate to “Annuities for Dummies,” making these products that have a general perception of being far too complicated for the average person to really understand easier to comprehend – both by design and via better product education resources – would remove a major obstacle to more growth in the annuity market.
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