Advisors report that annuities are requested by clients more than any other unsolicited product, according to a new study from Cerulli Associates.
Up from sixth place last year, annuities are now the most requested product with 60.8% of advisors receiving annuity requests.
Why are annuities so popular?
The increase in requests fits with the annuity sales numbers Cerulli tracks and shows a “flight to quality by investors,” said Donnie Ethier, a Cerulli analyst who worked on the report. He said it likely has to do with two things; many investors feel unprepared for retirement and more and more Baby Boomers are reaching retirement each day.
“Most investors’ portfolios have rebounded and returned back to where they were before the crisis, or even a little higher, and maybe they actually feel prepared for retirement, but at the same time, it’s hard to forget and they’re thinking, what if that happens to me after retirement?” Ethier said.
There’s also the press. Quoting the saying “There’s no such thing as bad press,” Ethier said that even though annuities have popped up in the mainstream news cycle more lately, sometimes for not so savory reasons, it has helped raise awareness of annuities nonetheless.
“The value proposition of annuities has finally gotten across,” he said. “They’re not too good to be true; they’re just too good to be free.”