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Life Health > Life Insurance

Survey: As fiscal cliff approaches, RIAs look to tax-deferred products

By Warren S. Hersch

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More than 8 in 10 fee-based advisors say that a product offering tax-deferred growth would benefit clients as Congress consider higher taxes to resolve the impending fiscal cliff deadline, new research reveals.

Jefferson National, Louisville, Ky., published this finding in a summary of results from a survey of 250 RIAs and fee-based advisors. The survey was completed on December 12.

The poll reveals that 75 percent of registered investment advisors and fee-based advisors say their clients are anxious about the impact of the looming fiscal cliff—and their biggest concern is rising taxes. Additionally, 85 percent of these advisors view tax-deferred solutions, such as variable and fixed annuities, as vehicles with which to avoid the impact of a tax hike near-term.

“Poised on the brink of the fiscal cliff, the political stalemate that is gripping Washington and driving volatility in the market is clearly a top concern of advisors and their clients,” says Jefferson National CEO Mitchell Caplan. “And this is driving an urgent demand for tax-advantaged investing solutions,”

Two-thirds of the survey respondents (67 percent) who are anxious about the fiscal cliff cite ongoing volatility as a primary concern. To better navigate market volatility, the report adds, RIAs and fee-based advisors are turning to tax-deferred alternative investment strategies. And 85 percent of them indicate that a low-cost tax-deferred investing solution with a broad choice of alternative strategies would benefit clients in a time of rising volatility.

More than 68 percent of the survey respondents have increased their use of alternative investments. And more than 61 percent believe that alternatives will become more important than traditional investments in the future, the survey funds.

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