Two-Thirds of Financial Professionals Say Income Distribution Planning is Top Client Goal for Pre- and Recent Retirees

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Financial professionals overlooking the opportunity to meet top client goal; less than a third recommend fixed and/or indexed annuities

A majority of financial professionals identified retirement income distribution planning as a key goal for pre-retirees and recent retirees but may be overlooking an opportunity to help them meet that goal, according to a recent survey by Saybrus Partners, Inc.

The survey found that nearly two thirds (65 percent) of financial professionals identified “retirement income distribution planning” as the biggest goal for clients in their 50s and 60s. The survey polled financial professionals at the 2015 FPA Annual conference held in Boston, Sept. 26-27.

Yet, when financial professionals were asked what products and/or services they most frequently recommend for clients in this age group as part of their retirement plan, only 27 percent selected “fixed and/or indexed annuities.”

“Financial professionals may not be recommending annuities as often as they could for pre-retirees,” said Mark Fitzgerald, national sales manager for Saybrus Partners. “It is clear that both new and veteran financial professionals have an opportunity to fill an unmet need in their clients’ portfolios. By educating themselves about today’s fixed and indexed annuities, which are continuing to evolve in their features and benefits, they can provide their clients with a full range of options.”

Fitzgerald continued, “Especially with the recent growth in broker-dealer and bank channels, where FIA market share jumped 10% in 2014 according to LIMRA Secure Retirement Institute, there is an even greater opportunity for education. Despite the growth, product variations commonly sold in these emerging FIA distribution channels tend to be less benefit-oriented, possibly due to these advisors being less familiar with the more robust features offered with many FIAs available today.” According to LIMRA Secure Retirement Institute, 67% of broker-dealer sales of FIAs in 2014 elected a guaranteed income rider and just 25% of bank sales did.

Meanwhile, the survey found that the most frequently recommended products by financial professionals were “mutual funds” and “advisory services/actively managed funds,” which were both selected by 60 percent of respondents, followed closely by “managed accounts” (54 percent). “Variable annuities” and “life insurance” were less commonly the top recommendation, at 35 percent and 15 percent, respectively.

“A client’s portfolio is most vulnerable in the years just before and after retirement. Losses, especially in the first few years, combined with withdrawals can significantly impact a client portfolio’s sustainability,” said Fitzgerald. “As such, financial professionals can take this opportunity to ensure these clients are adequately adjusting their portfolio from an asset accumulation strategy to retirement income distribution planning and are using a combination of products and services that both protect against market volatility and insure guaranteed lifetime income for their clients in retirement.”

Additional Findings

When the financial professionals were asked what clients in their 50s and 60s consider to be the biggest risk to their retirement portfolios, more than half (58 percent) said “outliving their savings.” Significantly fewer respondents reported risks such as a “major health crisis” (17 percent), “market volatility” (16 percent) and “taxes” (6 percent).

When asked what products and support they would like to add to their offerings to better address clients’ retirement needs, “better education” and “better technology,” were both selected by 60 percent of respondents. Other products and support they said they were seeking included: “more innovative/comprehensive products” (54 percent), “multi-solution products” (35 percent), and “better wholesaling support” (27 percent).

“This data suggests that despite the growth of FIAs and other retirement planning products, there is still a tremendous opportunity for both manufacturers and wholesalers to provide more comprehensive support for financial professionals,” Fitzgerald said.

The survey of 141 financial professionals, including registered investment advisors (RIAs), bank financial advisors and those affiliated with an independent broker-dealer, an insurance company and a national wirehouse, was conducted by Saybrus Partners at the 2015 FPA Annual conference held in Boston, Sept. 26-27. LIMRA Secure Retirement Institute data is quoted with permission from “U.S. Individual Annuity Yearbook – 2014,” copyright 2015.

ABOUT SAYBRUS PARTNERS

Saybrus Partners, Inc. is an insurance partnership firm that helps financial professionals address clients’ needs with insurance solutions for basic protection as well as income, estate, and business planning. Its partner firms include institutional financial advisories, insurance retailers and broker/dealers. With customized services to best fit its partners’ businesses, its capabilities range from traditional wholesaling to consultation with client meeting support.

Saybrus Partners is a subsidiary of The Phoenix Companies, Inc. (NYSE: PNX) with corporate headquarters in Hartford, Connecticut and consulting representatives located across the United States. Saybrus does not provide tax or legal advice. In California dba Saybrus Partners Insurance Agency, CA license #0G81229. Saybrus Partners is an insurance agency affiliate of Saybrus Equity Services, Inc., Member FINRA.


NAFA, the National Association for Fixed Annuities, is a national trade association exclusively dedicated to promoting the awareness and understanding of fixed annuities. NAFA is the only association whose sole purpose is advocating for the fixed annuity product.

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