Half of financial advisors’ clients are not talking with advisors about guaranteed lifetime income products such as annuities, said AXA US, a financial services company that handles annuity products and provides other financial services.
This is despite the fact that 80 percent of the people surveyed by AXA said they would be interested in such a product. AXA and the Insured Retirement Institute surveyed 1,000 individuals and 300 advisors to determine the interest in annuity products.
The interest shown by those surveyed shows that advisors who do not discuss guaranteed lifetime income products with their clients are missing an opportunity to build a relationship with them, AXA said.
“Financial professionals play a key role in supporting their clients in reaching their retirement goals,” said Kevin Kennedy, head of the individual retirement business at AXA US. “Clients want their financial professionals to move beyond the standard risk tolerance questionnaire and engage them in a thorough discussion of options, including income planning for healthcare expenses.”
“This research shows there is a disconnect between what the client needs and what the advisors are talking about. We work with advisors, as well as with end clients, to help the advisors gain the expertise to meet the clients’ needs,” he added. “Too many advisors focus just on risks and allocations.”
There is also an unmet need for conversations about health care costs, which are a substantial concern to retirees, he said. Annuities can be shaped to help meet those needs, as well as to meet the desire for a lifetime income source.
“This research underscores financial professionals’ pivotal role in helping retirement savers to gain comfort around their ability to withstand market volatility and the potential role of high quality annuity products in helping to achieve financial security,” Catherine Weatherford, president and CEO of the Insured Retirement Institute, said in a statement. “In return, financial professionals will be rewarded with higher client satisfaction.”
Fifty-six percent of individuals rate their financial professional highly when lifetime income is discussed, compared to 34 percent who do so when lifetime income is not discussed.
The research also found that 60 percent of individuals believe they are only somewhat or not very well prepared for a major health event. However, fewer than 20 percent said they have worked with their financial professionals to estimate retirement healthcare costs.
Almost all participants, 92 percent, said they realize inflation is likely to have an impact on expenses during retirement.