Why Do Financial Advisors Hate Annuities

Why Do Financial Advisors Hate Annuities Most financial advisors hate annuities because they lose control over that asset Most financial advisors hate annuities because they can t charge an ongoing fee

David Blanchett is skeptical that these clients are driven to ignore their advisors A more likely story he suggests is that advisors are unenthusiatic about annuities in large part because it April 6 2021 New research from University of Melbourne researchers has identified two reasons why financial advisers don t recommend annuities to their clients Orford Initiative s latest findings found advisers play a key role in recommending annuities but face barriers in doing so Senior research fellow Teagan Altschwager and associate

Why Do Financial Advisors Hate Annuities

Why Do Financial Advisors Hate Annuities
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It s loads cheaper has hugely higher returns and is more flexible If you need life insurance just buy an inexpensive term policy see my March 17 column Indexed annuities are If you ve ever encountered a financial advisor who insists that you should never look at annuities I suggest that you filter that noise out In this episode

Valid reasons Annuities are not for every retiree and we can come up with valid reasons to exclude a significant share of the U S population as candidates to purchase annuities Insufficient funds liquidity needs It s not possible to purchase annuities or other financial products without any savings Various reports estimate that 20 Annuities come with high annual fees and investors would be much better off just replicating the annuity investment portfolio on their own or with an adviser they trust in a regular investment

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Then why do advisors and investors have such a serious love or hate relationship with annuities The reason is a lot of these products have been misrepresented by commission hungry investment reps However that is where a good financial advisor that holds themselves out as a fiduciary can help bring some clarity The biggest challenge for Seeking the help of a fiduciary financial advisor can also make a big difference 2 Keep it simple Avoid overcomplicating things with exotic annuities filled with customization since these will be very costly Most financial advisors suggest going minimalistic and avoiding variable indexed hybrid or other types of annuities It s better

Seeking the help of a fiduciary financial advisor can also make a big difference 2 Keep it simple Avoid overcomplicating things with exotic annuities filled with customization since these will For many years RIAs shunned annuities but recently two major changes have made RIAs warm to them Firstly annuities compensation has become more aligned with RIA pay models and secondly with

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Why Do Financial Advisors Hate Annuities - Valid reasons Annuities are not for every retiree and we can come up with valid reasons to exclude a significant share of the U S population as candidates to purchase annuities Insufficient funds liquidity needs It s not possible to purchase annuities or other financial products without any savings Various reports estimate that 20