Advisors want to add annuities and other income solutions to their clients’ financial portfolios to secure more for their clients’ retirement.
“The past few years of market volatility have demonstrated the importance of guaranteed income in retirement,” said Alison Salka, LIMRA corporate vice president and director of retirement research,
Most advisors believe protecting clients from outliving their assets is the most valuable service they provide, according to a survey by the Life Insurance and Market Research Association.
The survey, released Monday, said 59% of advisors believe that outliving their assets is the greatest risk facing clients today.
“This is particularly true for less affluent households, who often must rely on their personal savings to generate retirement income and do not have enough assets to self-insure against longevity risk,” said Matthew Drinkwater, an associate managing director with LIMRA>
Fifty-six percent of advisors surveyed reported to believe guaranteed income product benefits outweighed non-guaranteed income solution benefits, up 14% from 2009. Because of these benefits, one in three clients is seeking more information regarding guaranteed income solutions. The LIMRA study indicated that 55% of advisors with clients who have less than $500,000 in investable assets believe annuity products should be included in financial portfolios.
While the study found a majority of advisors believe guaranteed income products, like annuities, are ideal for wealthier clients, LIMRA believes advisors’ increased acceptance of guaranteed income solutions can be attributed to improved communication by insurers regardless of their wealth.