Key findings include:
- Investors Seek Stability. Clients want secure retirement income above all else.
- 73% of dabblers and 79% of sellers said they never want their clients to have a year like 2008 again and will therefore continue to recommend VAs.
- VAs Gain New Respect. The market crisis of 2008 opened many clients' and advisors' eyes to the benefits of VAs.
- 50% of respondents said they started recommending VAs more because their clients are demanding "guaranteed investments."
- 57% of respondents said they increased their use of VAs because the "designs have become more attractive."
- VA Advocacy Is On the Rise. Advisors have dramatically increased their recommendations of VAs since 2008, mostly in response to greater client demand for guaranteed income.
- 49% of dabblers have increased their recommendations for VAs since the credit crisis.
- 60% of sellers have increased their recommendations for VAs since the credit crisis.
- 42% bring up VAs in "every conversation" with clients and see them as an important part of financial planning solutions.
- Top VA Sellers Appear to Be More Successful. Top VA producers tend to have more successful practices... and more high-net-worth clients.
- Roughly 45% have a combined fee- and commission-based compensation structure, most of which is commission-based.
- More than seven out of 10 sellers have more than a decade of experience in selling VAs, compared with roughly half of non-sellers and dabblers.
- The average allocation for new clients is 29% VAs, 14% mutual funds, 14% IRAs, 8% life insurance, 6% unified managed accounts/mutual fund wrap accounts and 29% other.
- Approximately a quarter of sellers had assets under management in excess of $100 million.
- Nearly a third of sellers had annual revenues (fees plus gross commission) in excess of $500,000.
- Sellers have double the number of high-net-worth clients (with investable assets between $1 million and $29 million) of dabblers and one-third more than non-sellers.
- A Better Understanding Changed Minds. Learning more about VAs' benefits from a colleague or wholesaler turned skeptics into advocates. Increasing educational efforts for financial advisors in this regard could give VAs even greater traction.
- More than 70% of dabblers and sellers say that a colleague or wholesaler influenced them to begin recommending VAs.
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