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How annuity advisors are meeting client needs

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When making product recommendations, advisors place great emphasis on the reputation and financial strength of a product’s parent company. In fact, 65 percent of advisors say that aspect is extremely important, while only 21 percent say it is somewhat important (Figure 7).

Other important considerations for advisors when recommending a fixed indexed annuity product to a client are high potential earnings (35 percent say it’s extremely important), high participation rate (33 percent say it’s extremely important) and high guaranteed minimum interest rate (29 percent say it’s extremely important).


Commissions play a role — whether large or small — in most every product an advisor sells to clients. Some may find it interesting that respondents across all categories ranked commissions lowest on the list of importance when it comes to recommending an FIA product to clients. For advisors with less than $250,000 in annuity premiums last year, 8 percent say high commissions are extremely important, while only 2 percent of advisors with more than $1 million in annuity premiums feel the same. In an interesting twist, for advisors with $250,000 to $1 million in annuity premiums last year, 31 percent say high commissions are not important.

All respondents rated high guaranteed minimum interest rate relative to other FIAs, short surrender period, premium bonuses and the number of indexed-linked interest crediting options as more important than commissions when recommending an FIA product to a client.

When recommending annuity carriers to clients, advisors who sell FIAs find the top three most important characteristics are dependability and consistency of the carriers; knowledgeable support personnel who have the right answers; and quality after-sales care and in-force support for clients (Figure 8).


It’s interesting to note that female advisors consider these — and all other characteristics mentioned in this section — more important than male advisors. To break it down, 82 percent of female advisors say dependability and consistency of the carrier is most important when recommending FIA annuity carriers to clients, while 68 percent of male advisors feel it is important. Other large gender differences are found in whether advisors feel that having knowledgeable support personnel is important (81 percent of women do vs. 66 percent of men) and whether the annuity carriers’ reputation in the industry is important (83 percent of women say it is vs. 61 percent of men).

Carriers that keep these differences in mind and tailor their services to the specific and different needs of each gender may have the upper hand when endeavoring to boost FIA product sales and market penetration.

Check back next week, when we’ll address how to successfully sell FIAs.


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