Demand grows for annuities
Although only a third of financial planners used annuities over the past year, demand for this product continues to grow, according to a survey released by Investment Trends.
Furthermore, a large number of Australians worrying about their savings running out during retirement present a perfect opportunity for the annuity market to develop.
Almost half of financial planners surveyed for the Investment Trends December 2011 Retirement Planner Report said they would use annuities in 2012.
Meanwhile, a quarter of Australian adults surveyed expressed some interest in this product.
However, there are many barriers to financial planners using annuities, according to senior analyst Recep Peker.
"For some they compete with other products in a high interest rate environment, such as term deposits that are easier to understand and return close to six per cent per annum," Peker said.
Most popular are long-term and short-term annuities, while lifetime annuities are only recommended by a small percentage of planners, according to Investment Trends.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
