Advisors Warm Up to Annuities

A new survey suggests that a growing number of financial advisors will consider annuities that are low cost and less complex.

A new survey shows that financial advisors’ acceptance of annuities is growing.

The “2021 RIA Protected Accumulation + Retirement Income Survey” found less than a quarter of advisors would not recommend an annuity even if it addressed a client’s needs. That compares with a third of advisors who gave that response in last year’s survey.

RetireOne and Protective Life Corporation jointly did the survey. It included 198 advisors who identify themselves as either an RIA, dually registered, hybrid or TAMP/TPIA.

If clients need principal protection, about the same percentage of respondents said they would recommend fixed annuities (38%), fixed index annuities (38%) or CDs (41%). But the clear winners for principal protection were bonds/fixed income (76%), money market funds (56%) and cash (48%).

Clients who want principal protection could get payout rates for fixed annuities over five-year durations that could be triple the payout of CDs over the same time period, the survey sponsors said in a press release.

Among respondents who don’t suggest annuities for clients, the primary reasons they don’t are fees, liquidity and complexity. David Stone, co-founder and CEO of RetireOne, noted in the release that the annuity landscape has changed in recent years, with many more options that are simpler and low cost.

“Products that are low cost and offer a guaranteed lifetime solution are the way of the future,” Stone said, “and we are more enthusiastic than ever about enabling fee-only fiduciaries to properly guide their clients into and through retirement they can enjoy.”

Aria Retirement Solutions’ RetireOne is an independent platform with fee-based insurance solutions from “A” rated companies. It serves more than 1,000 RIAs and fee-based advisors. Protective Life provides financial services through the production, distribution and administration of insurance and investment products throughout the United States. As of December 31, 2020, Protective had assets of approximately $127 billion.

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