The report, “2011 Portfolio Construction Dynamics,” explores challenges advisers face in generating a portfolio that can produce income throughout their clients’ retirement. IRI and Cerulli contend that dedicating a portion of a client’s withdrawal or income floor to a guaranteed income stream increases their chances of success of the overall portfolio.
The report also found that:
- Independent and insurance broker/dealers are the strongest sales channels for variable annuities.
- Advisers anticipate changes to their practice as a result of the increased need to aid clients in generating retirement income.
- Advisers expect an increase in the number of clients and revenue, as well as the need to use a broader range of investment vehicles to meet retirement income goals.
- Advisers are continuing to move to more widespread use of managed products.
“IRI research shows that the number one retirement savings concern among Boomers is that they will outlive the funds they have accumulated for retirement,” said Cathy Weatherford, IRI President and CEO. “Insured retirement strategies can help provide the security Boomers are looking to provide dependable, guaranteed income throughout their retirement. And based on the findings of this recent report, advisers looking to diversify their clients’ portfolios should consider variable annuities as a baseline income investment in their clients’ retirement plan.”
More findings from the report are available here.