RIAs least likely to use annuities for rollovers

Registered investment advisers are giving the cold shoulder to annuity products, according to the latest research from Cerulli…

Registered investment advisers are giving the cold shoulder to annuity products, according to the latest research from Cerulli Associates Inc.
A report released Thursday by the Boston research firm showed that only 20% of RIAs consider using immediate annuities for a portion of their clients’ rollover assets.
The analysis of annuity distribution by channel found that registered representatives in insurance-owned and independent broker-dealers had the biggest appetite for annuity products, with more than 70% of each group favoring annuities for rollovers.
Among wirehouse reps, Cerulli found that annuities are favored by 42%.
Wirehouse, insurance and IBD rep channels all expressed varying degrees of acceptance for both deferred and immediate annuity products.
Only 7% of insurance reps said neither immediate nor deferred annuities are good choices for rollover dollars.
This compares to 15% for IBD reps and 27% for wirehouse reps.
Among the RIA channel, 80% shunned annuity products for client rollovers.
“We see many firms looking at the RIA channel as an opportunity for annuity distribution, however we don’t see RIAs changing the way they view deferred annuities, mainly because most products are inconsistent with their fee-based business model,” Lisa Plotnick, Cerulli associate director and author of the report, said in a statement.