The health of the FIA market is perhaps best judged by those who sell more product. On this score, the trend is clear: The higher the overall annuity production (all product types) among respondents polled in the survey, the more likely that advisors were to say that FIA sales increased “somewhat” or “substantially” over the year prior.
Thus, 33 percent of advisors who sold between $250,000 and $1 million in premium experienced an increase in FIA sales; and more than 1 in 10 (11 percent) saw a “substantial increase.” In comparison, close to half of advisors (45 percent) whose annuity premiums topped $1 million enjoyed a rise in FIA production last year, and 14 percent saw a substantial rise (Figure 2).
Perhaps not unexpectedly, a higher proportion of insurance-oriented advisors than investment advisors saw gains in FIA sales: 31 percent versus 24 percent, respectively. Among those citing substantial increases, the insurance-oriented producers again were more highly represented: 10 percent versus 8 percent.
As to advisors polled who cited a modest or substantial decline in FIA production last year, those whose premiums were below $250,000 constituted the largest group at 18 percent. In contrast, fewer advisors whose premium levels exceeded $250,000 and $1 million cited declines in FIA production: 12 percent and 7 percent, respectively.
Turning to the year ahead, a solid majority (72 percent) of advisors who market FIAs say they expect sales of the products to increase. And roughly 3 in 10 (31 percent) anticipate substantial sales gains over the prior year.
Optimism about FIA sales rising in 2015 is most in evidence among these groups: advisors with an insurance-oriented practice (60 percent); those who have been in the business between 10 and 20 years (67 percent); and advisors whose income levels fall below $100,000 (63 percent).
Conversely, investment-oriented advisors are more likely than those with an insurance focus to say that sales are likely to remain the same in the year ahead (49 percent vs. 36 percent). Also notable in the camp anticipating flat sales in the coming year: the 46 percent of advisors whose incomes top $200,000 annually, in contrast to the 38 percent whose incomes range between $100,000 and $200,000.
Check back next week, when we’ll address the FIA sales pitch.