Education and training is the best way to increase the number of advisors who can see the benefit of fitting a variable annuity into clients’ retirement income plans, according to a survey released Monday by the Insured Retirement Institute (IRI) and Cerulli Associates.
When examining the most promising strategy for broadening the number of advisors who sell variable annuities, 50% of asset managers and 46.7% of insurers said that increased retirement income training was the best approach to pursue, the survey showed.
“As a whole, the financial industry has done a good job educating advisors on strategies to help consumers accumulate wealth and manage their financial resources, but we have room to improve when it comes to the decumulation side of the equation,” said IRI President and CEO Cathy Weatherford (left) in a statement. “When it comes to long-term financial security, IRI research shows that Boomers are most concerned about having sufficient income throughout their retirement. With the need for guaranteed lifetime income at an all-time high, there is a great incentive for the industry to ensure that advisors have the necessary tools and information to help alleviate client retirement concerns.”
The survey also found that:
- Insurance companies named being a "prudent innovator" as the most common product development strategy, with nearly half indicating that this is their preferred approach.
- Non-qualified variable annuities and income guarantees in defined contribution plans are ranked the highest by insurers when indicating future product and distribution opportunities — earning a 3.8 and a 3.7 out of 5 ranking respectively.
- More than two-thirds (63%) of insurers rank the independent broker/dealer channel as the leading space to grow variable annuity sales within the next two years. Rounding out the top three channels for opportunity are the bank channel and wirehouses, with 54.5% of insurers citing upcoming sales growth in both areas.
Read Annuity Assets Were Highest Ever in Q1: Morningstar at AdvisorOne.com.