Providing more investment income for Baby Boomers who are starting to retire, as well as other investors, is a top priority for many of us heading into 2006. Traditionally, annuities have been a key vehicle for reaching this goal. However, these products have come under strict regulatory scrutiny lately, generating significant controversy regarding proper disclosure of fees and expenses.
This has prompted some advisors to reconsider how they use annuities, and which ones to propose to clients.
A recent poll conducted by Investment Advisor magazine showed some interesting results:
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40% of advisors who took the poll never use annuities of any kind in client portfolios;
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Of those who use annuities: 35% use variable annuities, 12% equity-index annuities, 8% fixed annuities, 1% bond annuities, and 1% no-load variable annuities;
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None of the advisors polled use immediate or deferred annuities.
Please share your thoughts – do you recommend annuities? Why or why not?
If so, what type, i.e. Equity Index, Fixed Rate or Variable Annuities. How do you feel about the scrutiny the NASD has placed on EIA products? Does your BD supervise this activity and at what price?
