Annuity Adoption Expected to Grow

Conversations about annuities are becoming more focused on lifetime income, with more than one-third of investors (34%) reporting that the main reason for purchasing an annuity is to provide guaranteed income.

In a recent report, “The Evolution of the Annuity Industry,” Cogent Research and the Insured Retirement Institute (IRI) contend that a growing number of investors are starting to recognize that annuities are a way to secure retirement income. Nearly two-thirds (65%) of advisers currently selling annuities indicate that guaranteed income options are expected to increase in importance over the next five years – more so than any other factor. The report outlines opportunities and challenges with annuities from the perspective of financial advisers, investors, broker/dealer gatekeepers and insurance carriers.

Eight in 10 advisers who sell annuities report that they are having more client discussions about retirement income planning than they did five years ago. “Increased market volatility, shrinking retirement savings, and the disappearance of pensions have investors taking a long hard look at the value of annuities in their portfolios,” said Marie Rice, Custom Research Practice Director at Cogent Research. To further support this paradigm shift towards the need for retirement income and the emotional security that comes with it, more than one-third of investors (34%) report the main reason for purchasing an annuity is guaranteed income; and two-thirds (68%) of advisers report that they have received at least one client request for an annuity in the last 12 months.

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Overall, the annuity industry has seen significant growth over the past few years. Assets in both variable and fixed annuities have reached a record high of nearly $2.2 trillion in 2010, which is a 10% increase from the previous year.

Commonwealth Introduces Online Tool for Investors

Commonwealth Financial Network has launched Investor360°, an online tool for investors to view multiple aspects of their portfolio.

The platform offers performance reporting (including benchmarks), realized gain/loss data, enhanced account aggregation capabilities, the ability to export data to Excel and TurboTax, and an updated consolidated statement.

Features such as performance reporting, gain/loss information, and account aggregation are entitlement-based, allowing advisers to make these features available to individual users at their discretion. Any documents stored in Client360°, Commonwealth’s adviser-facing business management tool, may also be shared with investors at the adviser’s discretion.

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“With Investor360°, advisers have the ability to easily ‘impersonate’ a client’s online experience as the client is viewing it, allowing phone conversations to be much more effective,” said Darren Tedesco, managing principal of innovation and strategy.  

Additionally, Investor360° is integrated with TurboTax, providing investors the ability to import tax information electronically. Investor360° is compatible with Internet Explorer, Firefox, Safari (for Macintosh), and Chrome.

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