NAIFA Survey: Clients Nearing Retirement Want Risk Protection

“Risk management products like annuities have surged in popularity, particularly among older Americans,” said NAIFA President Terry Headley, in a statement announcing the survey results. “Clients are more interested than ever in protecting their nest eggs, ensuring that they can retire when they want and guaranteeing a lifetime income.”

The survey also found that about four in 10 advisors (44%) said their typical client nearing retirement age has less than $500 a month to invest. Of clients nearing retirement age, advisors said the following:

• 35% said these clients typically invest $101-$500 a month.
• 6% said they typically invest $51-$100 a month.
• 3% said they typically invest $50 a month.
• All told, 71% of NAIFA members said their typical client nearing retirement age invests less than $12,000 in a year (or less than $1,000 per month).

Nearly nine in 10 advisors (86%) said their clients under the age of 40 have less than $500 a month to invest, according to the survey. Of clients under the age of 40, advisors polled in the survey said the following:

• 50% said these clients typically invest $101-$500 a month.
• 28% said they typically invest $51-$100 a month.
• 8% said they typically invest less than $50 a month.
• Most advisors (94%) said their typical client under the age of 40 has less than $12,000 a year to invest in their future.

NAIFA has been vocal in its opposition to the Securities and Exchange Commission (SEC) putting brokers under the same fiduciary standard as advisors. “We need to be aware of the impact a universal fiduciary duty would have on our members’ ability to continue to serve the middle market,” Headley said in the statement. “Further regulation could increase costs or force more NAIFA members to no longer provide financial products and advice, which would limit the number of consumers who can benefit from our services.”

According to the survey, seven out of 10 NAIFA members said a regulation holding registered representatives to a fiduciary standard “would not result in those advisors doing a better job for their clients.”

Meanwhile, 70% of NAIFA members said they did not believe clients would abandon advisors working under the suitability standard of care if the clients had a better understanding that those advisors were not bound by a fiduciary duty. An additional 14% said they were not sure.