Fixed indexed annuities (FIAs) constitute the highest share of annuity revenue. This is according to a survey of 542 independent agents, career agents, independent broker-dealers, independent financial planners, independent financial professionals, wirehouse/full service broker-dealer reps and bank financial advisors who responded to an online survey sponsored by Athene.
Seven in 10 respondents have sold one or more FIA products in the past year. Independent agents are far more likely to be associated with FIAs than other types of financial professionals. And in addition, FIA revenue share is greater among professionals selling less than $250,000 in new annuity premiums.
Survey respondents hold a variety of positions—including independent agents, career agents, independent broker-dealers, IFA/IFPs, wirehouse or full service broker dealer rep and bank financial advisor. Those who responded to the survey, held in May 2015, revealed that not only has FIA premium revenue been on the rise in recent years, but they anticipate growing their FIA revenue in the near future.
This group also revealed that the highest proportion of their total annuity sales is in the fixed indexed annuities product type. In fact, survey results reveal, FIAs account for more than half of all annuities sales for survey respondents, or an average of 53 percent. With FIA sales representing such a high percentage of their annuities revenue, participants said that 20 percent of their total annuities revenue for the previous 12 months came from variable annuities sales, and 13 percent came from fixed annuities sales, other than indexed or hybrid. Immediate annuities represented only six percent of total annuities sales for survey participants, and four percent was from sales of deferred income or “longevity” annuities. Just three percent of total annuities revenue resulted from sales of structured or “hybrid” annuities, and one percent for all other types.
About one-third of brokers surveyed (30%) said that their FIA sales increased either substantially or somewhat in the past year over the year before, while more than half (57%) said that FIA sales remained at about the same level in the past 12 months as the previous year. Only 13 percent saw a decrease in FIA sales in the past year.
The FIA sales future picture looks bright, as brokers who are heavy FIA producers are most likely to have experience growth in this types of annuity product. The heavy producers also are most likely to forecast substantial increases in FIA premium sales volume in the coming year.
FIA growth looks positive across the board. A majority of survey participants (58%) said they expect their FIA sales to increase either somewhat or substantially over the next 12 months. More than one-third (38%) of respondents believe their FIA sales will remain about the same in the future year as they were for the current year. A scant 4 percent of respondents expect FIA sales to drop off either somewhat or substantially from the current year.