Speak with a Registered Agent: 1-866-223-2121

Speak with a Registered Agent: 1-866-223-2121

Survey Shows High Hopes for Fixed Index Annuities This Year


Back in March, Saybrus Partners, Inc. surveyed a group of financial professionals regarding their expectations about fixed indexed annuity sales for this year. Their expectations were very high, but keep in mind that this survey occurred before indexed annuities were included in the DOL fiduciary rule’s BICE requirements. Earlier this month NAFA summarized the findings in an article for their Annuity Outlook Magazine entitled “Survey Finds Vast Majority of Financial Professionals Expect Continued Indexed Annuities Sales Growth in the Next Year.”

Eighty-three percent of those surveyed believed that indexed annuity sales would increase over the next year. Perhaps even more telling was that 52% of the financial professionals expected double digit sales increases over the next year. These results go right along with LIMRA SRI sales data from 2015 showing an increase of 13% for fixed indexed annuity products. Indexed annuities had record high sales in the 4th quarter and full year of 2015. Of the top 5 products that showed the most sales growth for these financial professionals over the past year, indexed annuities were number 1. Forty-three percent of them saw indexed annuity sales growth. Variable annuities took the 4th spot, but just 7% of respondents saw growth in this category. Banks were the fastest growing channel for fixed indexed annuity sales.

The managing director of Saybrus Partners, Inc. attributed the indexed annuity growth to the flexible benefits and inexpensive fee structure that these products offer. Another reason for the growth is that people turn to indexed annuities during a bear market. More than half of the financial professionals said that fixed indexed annuities are the best product for their clients when markets are undergoing a correction or in a bear cycle. They beat out actively managed portfolios, life insurance, variable annuities, managed accounts, and mutual funds by a significant percentage. It’s a good time for a product that offers principal protection as well as the potential for market upside gains. Financial professionals and consumers like indexed annuities for their income guarantees, protection from loss, and the plethora of benefits and options available. Indexed annuities can help you meet your retirement goals while accounting for both longevity risk and market risk.

Responses to the question of what could be done at the organizational level to increase indexed annuity sales made it clear that the products available are not an issue. The financial professionals were looking for better support at the point-of-sale, more multi-solution products, better technology, better carrier education, and better wholesaling support. Advisors seem to be happy overall with the indexed annuities available. When it comes to electing riders on the indexed annuity products, LIMRA SRI found that annuities sold through banks have the lowest utilization of riders. The financial professionals believe that overall rider election could increase with more wholesaler education on their benefits, lower rider fees, increased point-of-sale support, more client awareness campaigns and new illustrative tools.

Overall, retirees and those close to retirement age see significant benefits and value from fixed indexed annuities. This is why sales have been increasing and are expected to continue on that upward trend. The financial professionals surveyed are looking for a little more support and education from the organizations producing indexed annuities. The DOL fiduciary rule poses a challenge to the indexed annuity industry, but not one that is too big to overcome. Consumers still see great value from these annuity products, even though advisors will have to change their commission structure and meet the BICE requirements.

Written by Rachel Summit

Follow Rachel, aka Finance Mama, on Twitter and Google+


For more information about the product mentioned in this article contact us here:

Newest Blog Posts

Information Request Form

If you have questions or would like more information, please complete this form and a licensed professional will be happy to help. For the fastest response, please select 'Phone' as your Contact Preference.

By providing your information and clicking 'Submit' above, you acknowledge that you have read and agree to this site's privacy policy. You also provide your consent to be contacted at the email address or phone number provided above (including any wireless number) by licensed agents or representatives from or on behalf of AFYI Holdings Group, LLC and other companies to provide the information requested and/or offer annuities or financial products. You understand that these calls or SMS messages may be generated using an automated telephone dialing system, a pre-recorded message, or artificial voice. Consent to receive such messages is not a condition to purchase any goods or services. You may opt out at any time by following the instructions in the messages you receive.  Receiving quotes and information through our website is free, and you are under no obligation to purchase any goods or services as a result of this request. You affirm that you are the subscriber of the provided telephone number or that the subscriber authorized you to provide the number. Message and data rates may apply. AFYI Holdings Group, LLC is committed to respecting your privacy and adhering to all applicable laws and regulations, including the Telephone Consumer Protection Act (TCPA).