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Annuity recommendations on the rise

By Reporter
14 April 2015 — 1 minute read

The proportion of financial advisers recommending annuities to their clients increased to 38 per cent in 2014, up from 32 per cent in the previous year, Investment Trends has found.

In the December 2014 Retirement Planner Report – compiled off a survey of 617 advisers – Investment Trends found 38 per cent of advisers recommended annuities to their clients in 2014, up from 32 per cent in 2013 and from 27 per cent in 2012.

“Planners continue to see a greater role for annuities as part of their retirement advice,” Investment Trends senior analyst Recep Peker said.


“In addition to already increasing usage, the intention to use annuities has also increased, with 59 per cent of planners intending to recommend annuity products in the coming year, up from 45 per cent saying so in the previous study.

“In recommending annuities, planners are responding to client concerns such as longevity risk. Healthy client interest will continue to buoy planner appetite for annuities in the current low interest environment,” he said.

Investment Trends found there was also an increase in the number of advisers using lifetime annuities as well.

“Thirty-nine per cent of planners [say] they intend to use them in 2015, compared with 31 per cent for long-term annuities (5 years or more) and 21 per cent for short-term annuities (less than 5 years),” a statement from Investment Trends said.

“In 2014, 19 per cent of planners used lifetime annuities, compared with 20 per cent for long-term annuities and 17 per cent for short-term annuities.

“Among planners who recommended income guaranteed products in the last 12 months the vast majority, 86 per cent, used a Challenger product,” the statement added.

Annuity recommendations on the rise
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