Annuities are now the most requested financial product by clients, as they look for a stable investment to help fund their retirement, according to an advisor survey by Cerulli Associates.
Ranked as the sixth requested investment product in 2012, investor demand for annuities increased 15 percent last year to put it at the top of the list, according to Cerulli's Annuities and Insurance 2012: Evaluating Growth Capacity, Flows and Product Trends, released Tuesday.
Among advisors queried, 60.8 percent indicated that they have had multiple clients this year make unsolicited requests for information about annuities. The second-most requests were for information on Roth IRAs. A year earlier, annuities ranked sixth on the list, according to Cerulli.
"Annuity requests are way up," said Donnie Ethier, senior analyst at Boston-based Cerulli. "We've seen a tremendous year-over-year increase in the number of times financial advisors receive requests from their clients for annuities."
The sudden strong interest in annuities, said Ethier, is being fueled by a growing number of baby boomers looking for stable investments for their retirement. According to industry estimates, 10,000 baby boomers will turn 65 years old each day for the next 19 years.
"Investors are looking for guarantees," Ethier said. "The fact that [interest in annuities] has gone up in just a year from number six to number one speaks to that. People are looking for safety; they're looking for guaranteed income."
While annuity awareness is growing, an estimated one-third of U.S. households are still unaware of annuities, according to Cerulli.
"Both the positive and the negative attention annuities have received in the media over the past four years has led to an overall growing awareness," Ethier said. "This presents a unique opportunity for insurers and advisors."