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.