Advisors’ Top Reason for Selling Annuities

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Amid Rising Sales, Advisors Cite Guaranteed Retirement Income as Top Reason for Selling Annuity Products

Annuity sales are rebounding and advisors expect to maintain, or even increase, their use of annuity products in the near future. At the same time, the composition of advisors is changing, as many advisors shift further toward fee-based compensation models. Annuity providers have an opportunity to support advisors using a variety of compensation models through this transition while highlighting the important benefits annuity products can bring to advisors and their clients.

When asked how important a list of factors was as reasons for selling annuities to clients, advisors cite the ability to generate guaranteed income in retirement as the top factor. In fact, over three-quarters (76%) of advisors, regardless of compensation type, cite this factor as very important. Diving into different types of annuities reveals that retirement income products and guaranteed rates are also among the leading consideration drivers for variable and fixed annuities, respectively. 

Annuity producers in the Broker/Dealer channels cite a variety of other reasons as being important as well, including principal protection, additional retirement savings, tax deferral and estate planning/wealth transfer.

RIAs, one of the only advisor segments that is growing, remain an attractive target for investment providers. However, RIAs as a group are far less likely to use annuities compared with their B/D peers. In fact, RIAs identify fewer motivating factors, selecting estate planning/wealth transfer as a reason for selling annuities at nearly half the rate as their B/D peers. Annuity providers looking to attract RIA interest should communicate the value and breadth of annuity products that fit a variety of retirement planning needs including principal protection, guaranteed income and tax deferral. In particular, product providers must demonstrate how their particular solution complements clients’ portfolios with other investment vehicles in order to win RIA business.


For more on annuities, review an overview of our latest advisor report, Annuity Brandscape™.

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This entry was posted in Brand and Messaging, Financial Services, Product Development and tagged by Meredith Lloyd Rice. Bookmark the permalink.
Meredith Lloyd Rice

About Meredith Lloyd Rice

Meredith Lloyd Rice is a vice president in Market Strategies' Syndicated Research division. She manages the firm’s syndicated research products focused on the financial advisor market and is the lead author of the Advisor Brandscape® report. She has more than 15 years of experience managing research initiatives in the wealth management industry and has explored a wide range of business issues on the client and supplier side. Prior to joining Market Strategies, Meredith was an associate VP at Chatham Partners where she oversaw a team of researchers and managed the overall design, analysis and interpretation of large-scale studies for institutional financial services clients. Meredith earned an MBA from Thunderbird School of Global Management and a bachelor’s degree from Colgate University. She is a former collegiate rower who now gets her exercise chasing after her 2-year-old daughter and Clumber Spaniel.

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