How to help clients understand annuities

Financial advisors have a unique opportunity to add value by helping their clients understand the role that it

Published By - knowledgeNile

Annuities are long-term, tax-deferred vehicles designed for retirement. Variable-annuities involve investment risks and may lose value.

Earnings are taxable as ordinary income when distributed and may be subject to a 10% additional tax; if withdrawn before age 59½.

Helping clients:

Financial advisors have a unique opportunity; to add value by helping their clients understand the role that it can play in helping to secure their financial futures.

It tends to go underutilized because consumers don’t always fully understand their benefits, but advisors can unlock the potential of this untapped resource to help clients meet their retirement and lifestyle goals.

Variable-annuities are a valuable resource for consumers’ retirement planning; at a time when Americans are more concerned about their future family finances than ever before.

They are a flexible tool that can protect buyers’ income from market risk, provide a tax-deferred instrument for growth; and enable both investment freedom today and financial freedom in retirement.

Breaking into new conversations about annuities

The retirement industry is challenged by the biases against annuities; the language used to describe them, and the limited understanding of the product among consumers who are more likely to value; what an annuity can provide than they are to identify those benefits with annuities as a product.

Advisors have a chance to play a key role in overcoming these challenges by helping clients consider strategies that better integrate their investment preferences and retirement income needs.

These strategies should account for the benefits of variable-annuities; as a protected income stream that still provides the potential for market growth. With the right kind of education and guidance; clients can better understand the role that annuities can play in growing their investment portfolios and securing their financial futures.

“A study conducted by Jackson and the Insured Retirement Institute; found that just 21% of savers chose an annuity when framed as a pure investment, but 72% of the same group selected an annuity when described as a tool to provide retirement income over a long period.”

Jackson provides clear and concise materials about annuities designed to support your client conversations and offer straightforward guidance on the realities of retirement.

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