Low interest rate caps present the biggest challenge to advisors selling FIAs (Figure 9). In fact, for advisors with $1 million or more in annuity premiums, 46 percent say the caps are their biggest hindrance to selling more, while 39 percent of advisors with $250 to $1 million in annuity premiums cite them as the biggest challenge. Thirty percent of advisors with less than $250,000 in premiums last year say the caps are a challenge for them.
Negative client perceptions of annuities and the current interest rate environment are two more high-ranking challenges for advisors in all premium generation brackets. Other challenges include clients not wanting to tie up their money, difficulty in finding qualified prospects and navigating compliance and regulatory requirements.
The good news for the industry is that the lowest on the list of challenges are: clients preferring other products, products are too complicated for the advisor to understand and clients can’t afford FIAs. In fact, only 1 percent of advisors in the business for 20 years or more said clients without enough money to afford an FIA was a challenge, while only 2 percent of advisors on the job 10-20 years cite it as a challenge.
How can advisors sell FIAs more effectively? Fifty-two percent of advisors say having more or better qualified leads would do the trick. Forty percent feel simpler product design would help and 39 percent say more effective marketing material would aid them when selling more effectively. Fifty-five percent of those with annual incomes of $200,000 or less feel that having more qualified leads would help, while only 40 percent of those making more than $200,000 feel the same. However, almost half (43 percent) of those making more than $200,000 per year say that simpler product design would help them sell more (Figure 10).
Fifty percent of female respondents vs. 36 percent of male respondents say that more training and education would help. Advisors on the job for 10 years or less are more eager for training, with just over 50 percent saying they would benefit from it, while just 34 percent of those in the business more than 20 years feel it would help.
Live telephone support, higher commissions and sales incentives were least important to respondents desiring to sell FIAs more effectively.