Broker-Dealers Embracing Fixed Indexed Annuities as Demand Grows
July 27, 2015 by Andrew Simonelli
The Insured Retirement Institute (IRI) today released a new research report showing that fixed indexed annuities (FIAs) are becoming a greater part of broker-dealers’ annuity business. The IRI report found that FIAs made up 10 percent of total broker-dealer annuity sales in 2014, and half of broker-dealers expect this share to continue to grow.
“The retirement income market continues to evolve its product offerings, developing innovative strategies to deliver guaranteed lifetime income to consumers,” IRI President and CEO Cathy Weatherford said. “The evolution of fixed indexed annuities is representative of this trend, with a significant percentage of FIAs being sold with lifetime income benefits. Moving forward, broker-dealers anticipate that higher interest rates, lifetime income benefits, and principal protection with upside potential will drive continued FIA sales growth.”
Other key findings from the report:
- Fixed indexed annuity sales increased 24 percent during the past year, rising to $48 billion in 2014.
- Eight in 10 distributors say their sales of FIAs are growing, and four in 10 say sales are growing significantly.
- Half of distributors believe FIAs will make up a greater percentage of their overall annuity sales in the future.
- Nine in 10 distributors make at least five FIAs available to their advisors.
About the Insured Retirement Institute: The Insured Retirement Institute (IRI) is the leading association for the retirement income industry. IRI proudly leads a national consumer coalition of more than 30 organizations, and is the only association that represents the entire supply chain of insured retirement strategies. IRI members are the major insurers, asset managers, broker-dealers/distributors, and 150,000 financial professionals. As a not-for-profit organization, IRI provides an objective forum for communication and education, and advocates for the sustainable retirement solutions Americans need to help achieve a secure and dignified retirement. Learn more at www.irionline.org.
