Six in 10 financial advisors who sold more than 10 annuity contracts per year upped their recommendations, as did the so-called “dabblers,” those who sold less than 10 contracts annually, the research found.
A majority of dabblers (73%) and sellers (79%) said they will continue to recommend variable annuities because “they never want to see any of their clients experience a year like 2008 ever again.”
Half of the respondents said they started recommending variable annuities in response to client demand for guaranteed investments. Almost six in 10 said they increased their use of variable annuities because the “designs have become more attractive.”
“The fact that fewer people today feel confident that they will be able to meet their financial needs in retirement is driving a robust market for lifetime income solutions,” IRI President and CEO Cathy Weatherford said in a statement.
The study also showed that top sellers of variable annuities had more successful practices. Approximately a quarter of the “sellers” had assets under management of $100 million and nearly a third had annual revenues (fees plus gross commission) in excess of $500,000. They also had double the number of high-net-worth clients of “dabblers” and one-third more than advisors who never sold any annuity contracts.
The online survey polled 500 advisors. It was conducted by InsightExpress on behalf of AllianceBernstein and IRI in November 2011.