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Retirement Planning > Retirement Investing > Annuity Investing

Advocates Take Aim at Advisor Annuity Skepticism

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What You Need to Know

  • Thanks to product developments and years of advocacy work, annuity solutions are subject to less undue investor skepticism.
  • As investors grow more amiable to annuities, the main distribution chokepoint remains the retirement advisory community.
  • To remain relevant, advisors must set aside their focus on pure accumulation and offer retirement income solutions.

Back in June 2018, a group of more than two dozen financial services companies came together to form the Alliance for Lifetime Income, with the objective of educating Americans about the importance of protected lifetime income solutions.

Since that time, the group has generated substantial online content, tools, thought leadership and even new terminology to simplify a complex (and at times controversial) topic. Now, in a new interview with ThinkAdvisor marking the group’s fifth anniversary in operation, Jean Statler, CEO at the Alliance for Lifetime Income, says 2023 will be a critical year for the group’s mission.

According to Statler, after years of being bashed by the likes of Ken Fisher and other well-known annuity skeptics, guaranteed income solutions have finally reached a level playing field in the retirement advisor community. As such, the ALI will be focusing its outreach efforts in 2023 on ensuring advisors understand the role of annuities in retirement portfolios.

Annuities’ Time to Shine?

“The public conversation around annuities has shifted from negative to positive in most circles,” Statler says. “Here in late 2022, most in the advisory community are now at least neutral when it comes to annuities. That’s a huge change that we have seen over the past five years.”

Another change seen in just the last year or two, Statler says, is the movement by major retirement plan recordkeepers towards “in-plan annuitization,” as demonstrated by Fidelity. Statler says retirement advisors must keep abreast of these developments, as there are likely to be impacts on the pace of rollovers and on investors’ decisions about where to custody assets.

According to Statler, as soon as modern annuity solutions are put on a level playing field and are not subject to undue skepticism or misinformation, they become popular. From her point of view, this is indeed happening, and the U.S. retirement advisory industry is better prepared to consider annuities in a factual and fair way.

New Advisor Approaches Boost Annuities

Statler says the proliferation of non-commission-based annuity products has been liberating and exciting for the financial advisor industry. In fact, in the ALI’s experience, advisors must work harder to update their understanding of what is available in the annuity marketplace today — because things have changed so dramatically.

“As we move into 2023, it is gratifying for us to see that it is no longer hard to talk to an investor about protected income,” Statler says. “Where the chokepoint remains is with the advisors, frankly, but we do see a softening there, as well. Their clients are coming to them in droves, wanting to hear about things other than mutual fund investments and accumulation.”

Statler says fee-based fiduciary advisors are in the driver’s seat, with great opportunity for growth in traditional and emerging service areas. However, while they have huge opportunities for success, they also must ensure they are meeting new client expectations and demands. Simply put, the client population is rapidly aging, and the advisor-client conversation in 2023 and beyond must evolve away from pure accumulation.

“Our members tell us they continue to see that annuity wholesalers are calling on the same innovative advisors who are distributing annuities,” Statler notes. “They want and need to see more advisors distributing annuities. Not only do their clients need access to guaranteed income, this presents an opportunity for fiduciary advisors to grow and protect their assets under advisement.”


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