Retirement plans have a greater chance for success if they are backed by investment portfolios that include guaranteed retirement income, such as from a variable annuity, says a report released this week by the Insured Retirement Institute (IRI).
Produced in partnership with research firm Cerulli Associates, the 2011 Portfolio Construction Dynamics report proposes that variable annuities can provide clients a retirement income solution, and demonstrates the growth of the fee-based pricing model used by independent broker/dealer and advisor account managers.
The IRI is a trade group that represents the insured retirement industry and promotes annuities.
IRI President and CEO Cathy Weatherford said IRI's research shows that the top retirement savings concern among boomers is that they will outlive their retirement savings. "Insured retirement strategies can help provide the security boomers are looking for to provide dependable, guaranteed income throughout their retirement," she said.
Weatherford said advisors looking to diversify their clients' portfolios should consider variable annuities as a baseline income investment in their clients' retirement plan. "As a portfolio foundation, insured retirement strategies can provide advisors flexibility to meet the unique needs of their clients," she said.
Other IRI report findings include:
Independent and insurance broker/dealers are the strongest sales channels for variable annuities.
Advisors anticipate changes to their practice as a result of the increased need to aid clients in generating retirement income.
Advisors expect an increase in the number of clients and revenue, as well as the need to use a broader range of investment vehicles to meet retirement income goals.
Advisors are continuing to move to more widespread use of managed products.