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Life Health > Annuities > Fixed Annuities

Fidelity Measures the CD-Annuity Literacy Gap

By Allison Bell

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Fidelity Investments recently conducted a consumer knowledge survey using a non-random sample of Americans that was designed to give annuities the edge.

Even though Fidelity did its best to put its statistical thumb on the annuity side of the scale, the company found that the survey participants knew a lot more about bank certificates of deposit, or CDs, than they did about deferred fixed annuities.

(Related: New York Life and Fidelity Join to Offer Variable Annuity)

Fidelity offers its customers both bank CDs and annuities.

The company organized the survey to find out what consumers are thinking about fixed-income products.

The survey managers intentionally designed the sample to include extra retirees, annuity owners, and investors with at least $250,000 in investments. The survey team collected responses from 1,004 U.S. adults ages 50 to 75. About 25% of the participants said they owned CDs, and 23% said they owned annuities.

Here’s what the survey participants did not know about CDs:

  • 64% did not know how much cash they would need to get a CD.
  • 60% did not know the current rate of return.
  • 38% did not know what happens when a CD matures.

Here’s what the participants did not know about deferred fixed annuities:

  • 88% did not know how much they would need to get a deferred fixed annuity.
  • 76% did not know the current rate of return.
  • 68% did not know when happens when the contract matures.

But Fidelity did find one area where annuities had the edge: awareness of how to buy the product.

About 51% of the survey participants did not know they could get a CD from an investment firm, and 74% did not know they could get a CD from an independent financial advisor.

Only 44% of the participants did not know they could an annuity from an investment firm, and only 51% did not know that they could get annuities from independent financial advisors.

— Read Fidelity Joins Health Insurer Group, on ThinkAdvisor.

— Connect with ThinkAdvisor Life/Health on LinkedIn and Twitter.

Allison Bell

Think_Allison

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NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.