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NFP Advisor Services Group Publishes Aite Study On Guaranteed Income

Stocks in this article: NFP

NEW YORK, Aug. 8, 2012 /PRNewswire/ -- NFP Advisor Services Group today published the results of a study that assesses independent financial advisors' current position on guaranteed income as its own unique asset class and details their present and potential uses of the product. NFP Advisor Services Group offers broker/dealer and asset management products and services to financial advisors, including RIAs and hybrid advisors, and is a business segment of National Financial Partners Corp. (NYSE: NFP), a leading provider of benefits, insurance and wealth management services.


James Poer, President of NFP Advisor Services Group, said, "To attract and retain clients, advisors must keep up with the dynamic, ever-changing investment environment. One of our goals is to be at the forefront of that change, providing advisors with unique insights and innovative solutions to help them stay ahead of the curve with their clients. This study clearly indicates that the appeal and practicality of guaranteed income investments is rising, and we are pleased to be able to provide additional insight on this topic."

The study, commissioned by NFP Advisor Services Group, and produced by leading independent research firm Aite Group, utilized a 360 degree approach including perspectives from investors, independent advisors and leading insurance carrier executives. It explores the gap between consumer need and advisor utilization. Some of the points found in the study are:

  • In 2010, 48% of all U.S. households indicated an interest in products that provide guaranteed income for life. Investors are willing to accept a low rate of return for such protection.


  • Consumer Survey Respondents were willing to pay between 4 – 6 % of assets to guarantee they wouldn't run out of money in retirement. 1


  • Yet financial advisors affiliated with an independent registered investment advisor only recommend guarantees 49% of the time and financial advisors affiliated with an independent broker/dealer only recommend them 69% of the time when clients are facing longevity risks.


  • Academic research of Peng Chen, Moshe Milevsky and others indicated that income guarantees have delivered higher returns and reduced shortfall income risk levels while addressing sequence of return, investment and longevity risk factors for clients.    

Retirement income portfolios exist for a reason – to provide income over a lifetime, which can strain many portfolios lasting more than 30 years. Uncertainty, rising medical costs and sequence-of-risk returns require advisors to be open to exploring solutions in the clients' best interests. Guaranteed income solutions represent a missed opportunity and deserve serious consideration from advisors.

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