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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