LIMRA Releases Adviser Insights on Guaranteed Income Products

A survey of more than 1,000 financial professionals elicited mixed opinions on the effectiveness and reliability of guaranteed income products such as annuities.

In times of economic uncertainty and market volatility, guaranteed income products such as annuities can provide investors with peace of mind. However, financial professionals including advisers have varying views on who should invest in these products and with how much of their assets.

According to a recent study by the LIMRA Secure Retirement Institute, more than 70% of advisers say affluent investors with $100,000 to $499,000 in assets; and mass-affluent clients with assets worth between $500,000 and $999,000 are the most suitable client base for guaranteed income products. The study also found that three in 10 advisers with clients having an average of $1 million in assets believe these investors could also benefit from guaranteed income products.

As for how much should be invested in these products, the answer varied greatly depending on the type of adviser and the segment of the market being surveyed. On average, LIMRA found that advisers recommended just under one third of clients’ assets should be used to buy a guaranteed income product. While nine in 10 advisers agree guaranteed income products provide their clients with peace of mind, 40 percent of advisers say these products compromise their ability to properly manage their clients’ portfolio. Thirty-percent believe the products are too complicated.

These findings are from What Do Advisors Think About Retirement Income Planning, which is available to LIMRA members.