Advisors have dramatically increased their recommendations of variable annuities since the 2008 credit crisis, mostly in response to greater client demand for guaranteed income, according to a new survey.
The Insured Retirement Institute and Alliance Bernstein LP published this finding in a survey released today at IRI's 2012 Marketing Summit, being held in New York City at the New York Hilton, April 1-3. The study offers insights into how and why financial advisors are using variable annuities as demand for more predictable and steading income increases.
Conducted by market research firm InsightExpress, the survey polled advisors who have either a FINRA Series 6 or FINRA Series 7 and an insurance license. Eight in 10 of the respondents use these products. And nearly a third of these sold more than 10 contracts in the past year.
The survey segments participants into three categories: sellers (sold more than 10 contracts per year); dabblers (sold between 1 and 10 contracts annually); and non-sellers (sold zero contracts).
Nearly half of the dabblers (49%) and 60% of sellers have increased their recommendations for VAs since the credit crisis, the survey finds. And 43% discuss VAs in "every conversation" with clients, viewing the products as integral to a financial plan.
"The fact that fewer people today feel confident that they will be able to meet their financial needs in retirement is driving a robust market for lifetime income solutions," says IRI President and CEO Cathy Weatherford in a prepared statement. "Our survey found that more and more financial advisors are turning to VAs as a second portfolio solution because they provide guaranteed income and can help clients attain financial security in retirement."
