Financial Advisors Not “Up” on Annuities?

Posted on July 22, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

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Results of a New Survey

[By Staff Reporters]

In the interactive June edition of Investment Advisor magazine, Savita Iyer-Ahrestani reported on a new study of annuities.

Of course, subscribers of the Medical Executive-Post already know that more and more Americans are counting on financial advisors to help them prepare for a secure retirement; rightly or wrongly. And, this includes physicians and medical professionals.

But, what if the “advisors” are not up to the task – or even just product salesmen – as reported by Iyer-Ahrestani?

The Spectrem Group Survey

Mitch Politzer, senior VP of Lincoln, Nebraska-based Ameritas Advisor Services, had a suspicion that might be the case, so he teamed up with Chicago-based market research firm Spectrem Group and put together a survey aimed at testing advisor know-how and opinion on the kinds of investment products available on the market today.

Results

“The results of the survey showed that most financial advisors are really very skilled at investing for their clients, as they’re driven by equity markets (and to a lesser degree bond markets) and a desire to outperform industry benchmarks,” Politzer says.

“This works for the accumulation phase of a client’s life, yet advisors are less skilled when they have to shift gears for the phase of a client’s life when they’re interested in income and sustaining their assets.”

Gun-Shy on Annuities

Most advisors, Politzer says, seem to have dated beliefs about various retirement products, are slow to innovate, and most are gun-shy when it comes to annuities. According to the survey, 70% of advisors are concerned about locking their clients into a long-term retirement income product, and if they do, they would prefer the product not be an annuity.

Assessment

This survey of professional advisors shows strength in the “accumulation-phase” that is not matched when it comes to income and asset preservation during the “distribution-phase.” www.MedicalBusinessAdvisors.com

And, are FAs really shy about annuity product sales with their traditionally high commission rates?

Conclusion

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