"Our study found that the majority of advisors feel longevity — outliving their assets — to be the greatest risk facing their clients," said Matthew Drinkwater, associate managing director, LIMRA’s retirement research. "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."
"Advisors consider protecting against longevity risk one of their most valuable services, and recognize annuities provide a guaranteed lifetime income stream that will mitigate part or all of this risk for their clients," he added.
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The study revealed that in 2011, more advisors believed the benefits of guaranteed income products outweighed the benefits of non-guaranteed income solutions than did in 2009, 56% versus 40%.
In addition, six in 10 advisors said guaranteed income solutions, like annuities, are well received by their clients. Nearly half of advisors said guaranteed income solutions should be used to cover non-discretionary expenses, up 10 percentage points from 2009.
The study also found that a large number of advisors feel these guaranteed income products like annuities are suitable for their wealthier clients as well. Forty-two percent of advisors who reported that their typical clients had US$1 million or more in investable assets said guaranteed income products were most appropriate for clients with investable assets of US$1 million or more.
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