Advisers Want Improved Annuity Options for Clients

Three-quarters of advisers believe they understand annuities well, yet of that number, 62% say their clients do not.

As annuities struggle to gain traction within the retirement industry, advisers are finding it increasingly difficult to address various client needs with few annuity options, according to a recent study from Global Atlantic Financial Group.

The nationwide study—which surveyed 400 advisers—found that 56% of those surveyed consider annuities as an integral factor to retirement planning, but nine out of 10 (90%) believe it’s troubling to tackle client needs with the “one-size-fits-all” approach in a single annuity. If these advisers were granted a multi-product platform with access to distribution partners to advise certain strategies dependent on client needs, 96.4% would heavily consider increasing their use of annuities.

A majority of advisers (57%) believe multi-product annuity platforms allow for tailored retirement planning given a client’s request, and 51% pointed out the simplicity in having one point of contact for various offerings. In addition to these platforms, advisers are calling for resources and investor education. Three quarters (76%) say they have a strong understanding of annuities, yet 62% of those advisers don’t think they can say the same for their clients.

“Advisers recognize that they need to offer choices on how to solve their client’s challenges and goals solutions to stay competitive,” says Paula Nelson, president, retirement at Global Atlantic Financial Group. “But in order to be effective, they need partners that are not only offering a robust line-up of products, but also providing education, guidance, and consultation when needed.”

According to the survey, when asked how their clients are educated, 62% of advisers say it is from product features, and 53% utilize written materials given by partners or the company. When asked what could help advisers utilize annuities among clients, exactly half of advisers say improved guidance and education from distribution partners that explains the difference between products would help, and 46% believe the ability to withdraw from the annuity during emergencies would do so. Additionally, only 31% of advisers would rather have fee-based annuities rather than commission-based.

More information on the survey can be found here.