Just as advisors’ use of exchange-traded funds continues to rise, advisors are shying away from annuities, according to the Financial Planning Association’s 2014 Trends and Investing survey.
They survey, conducted by the Financial Planning Association’s Journal of Financial Planning and the FPA Research and Practice Institute, found that more than 79% of advisors are using and recommending ETFs today versus 40% in 2006.
The survey also found that 39% of advisors plan to increase their use of ETFs over the next 12 months — the highest anticipated increase among 17 investment vehicles.
However, the survey of 288 advisors of various backgrounds, conducted in March, found that only 41% of advisors currently use or recommend variable annuities, compared with a high of 58% in both 2006 and 2008. Twenty-nine percent of planners surveyed say they are currently using or recommending fixed annuities for clients, down from a high of 49% in 2010.
Advisors’ long-term economic outlook is positive, according to the survey, with 57% “bullish” for the next five years, compared with just 39% who are bullish over the next six months.