RIA Survey Reveals Advisor Concerns About Client Retirement Readiness

Chris Latham, Managing Editor, Wealth Solutions Report

RetireOne And Allianz Life Survey Of 200 RIA-Based Advisors Finds Macro Factors, Hesitance To Use Annuities, Put Clients’ Retirement Portfolios Under Pressure

A survey of 200 RIA-based advisors found that the majority of respondents believe their clients have serious concerns about being able to retire comfortably, and that a large minority of respondents are either hesitant to use annuities for their clients or underinformed about them.

RetireOne, an RIA-focused platform for fee-based insurance solutions, and Allianz Life Insurance Company of North America, released the 2023 RIA Protected Accumulation + Retirement Income Survey.

According to the survey, advisors said their clients were concerned about how inflation would affect their retirement portfolios (97% of respondents), about healthcare costs in retirement (93%), that they would outlive their retirement savings (86%), whether their Social Security benefits would be sufficient (85%) and that employer-provided retirement benefits might be inadequate (63%).

David Stone, Founder and CEO, RetireOne

“Rising interest rates have been challenging for investors,” said David Stone, founder and CEO of RetireOne. “The upside is that annuity guarantees and payout percentages have also risen, which in turn brings down the cost of creating lifetime income streams.”

However, the survey also found that fewer than half of respondents said they recommend fixed annuities for clients in need of principal protection, 44% were less than enthused about the idea of recommending advisory annuities to clients and 40% do not allocate a portion of client portfolios to income annuities.

Meanwhile, according to the survey, nearly 40% of respondents were unaware that they do not need an insurance license in order for their practices to use fee-only advisory annuities, and 30% were unaware that some fee-only annuities both lack surrender charges and cost less than commission-based annuities.

Corey Walther, President, Allianz Life Financial Services

The survey also presents several suggestions for RIAs seeking to improve their clients’ retirement readiness. These include enabling advisors who transition from wirehouses and regional broker-dealers to partner with Outsourced Insurance Desks (OIDs) to move annuities, and to consider using Advisory Fixed Index Annuities (FIAs) and Registered Index Linked Annuities (RILAs) that historically benefit from high interest rates.

“We’re only months away from the year in which the greatest cohort of Americans will turn 65 in our nation’s history,” said Corey Walther, President, Allianz Life Financial Services. “Given the ongoing risks to a retirement income strategy like inflation and market volatility, it is not surprising that so many respondents say their clients are asking about how to protect their income in retirement.”

Chris Latham, Managing Editor at Wealth Solutions Report, can be reached at clatham@wealthsolutionsreport.com

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