Annuity Owners Show What They're Really Thinking
What they said about their annuity professionals might shock some regulators.
Most owners of nonvariable annuities like them, according to new survey results.
The National Association for Fixed Annuities hired Greenwald Research, an independent polling firm, to conduct the survey. The sample included 404 U.S. residents ages 50 and older who own a traditional fixed rate annuity or a nonvariable indexed annuity.
The percentage of participants who said they were glad or very glad they owned their contracts was 80% for traditional fixed annuities and 76% for nonvariable indexed annuities. The percentage who said they were sorry or very sorry was just 2% for fixed annuities and 3% for indexed annuities.
More than 85% of the annuity owners said their financial professionals had explained the products well or very well.
What it means: The U.S. Department of Labor annuity sales standards effort may give the impression that typical annuity owners hate their annuities. The NAFA survey results suggest that owner satisfaction levels could be high.
NAFA: NAFA is a Washington-based group for annuity issuers, distributors and other individuals and companies with an interest in non-variable annuities.
The survey: Greenwald conducted the survey in December 2023.
The participants all bought individual annuities with help from financial professionals. They either had or once had at least $100,000 in investable assets.
Only 13% of the participants were in their 50s, and 53% were in their 60s. Most of the rest were ages 70 through 80.
Satisfaction: The NAFA survey annuity satisfaction levels compare with a satisfied-or-very-satisfied level of 78% for banks’ credit cards and debit cards, which was reported in recent American Bankers Association survey results.
Gallup recently found a satisfaction level of 89% for the way things are going in the personal lives of people with an annual household income over $100,000. The firm reported an overall personal life satisfaction level of 78%.
Details: Many states are now implementing annuity sales rules that require annuity professionals to act in the best interest of the clients.
About 90% of the NAFA survey participants said they believe their annuity professionals had their best interests in mind.
About 45% of of the fixed annuity owners and 43% of the indexed annuities bought their contracts using cash that was not part of a 401(k) plan, an IRA or another arrangement that would be subject to the Labor Department’s proposed investment advice fiduciary definition.
Only 22% of the participants’ fixed annuities and 16% of their indexed annuities had an estimated value over $350,000; 22% of the fixed annuities and 32% of the indexed annuities had an estimated value under $100,000.
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