Displaying items by tag: investors

Financial advisors understand that fixed annuities often face a perception hurdle. Their clients envision handing over most of their hard-earned wealth and relinquishing control, sacrificing legacy for guaranteed income. But this all-or-nothing perspective overlooks the nuanced role these annuities can play in a diversified financial plan.

Speaking at a Morningstar conference, Wade D. Pfau, PhD, CFA, RICP®, founder of Retirement Researcher, offered his suggestions to advisors. "The idea of a tradeoff between meeting a spending goal versus not being able to provide a legacy is misguided," he said. "With the conversation around annuities, it's important to remember it's not all or nothing. It's not, 'Do I put everything in the annuity, or do I put everything in investments?'"

Helping clients see fixed annuities as part of a balanced approach is essential. By providing a secure income floor, fixed annuities enable the remaining parts of the portfolio to meet their other financial objectives, such as growth and flexibility.

Building a portfolio need not be a zero-sum game. Fixed annuities don't have to steal the show – they can be valuable supporting actors, providing income stability while the rest of the investments shine in their own respective roles.

Finsum: Retirement expert helps advisors broaden their perspective on how to discuss fixed annuities with their clients.


Published in Wealth Management

For investors nearing or in retirement, navigating the delicate balance between capital preservation and growth can be a tightrope walk. While holding ample cash provides comfort during market downturns, it risks missing out on potential gains. Enter the buffer ETF, a unique investment vehicle offering shelter from storms while still allowing a path to sunshine.


These ETFs, also known as defined outcome ETFs, employ options to create a buffer against market declines. A typical fund might protect holders against, say, the first 9% of losses. But just like insurance, this protection comes at a price.


Unlike regular ETFs that track an index precisely, buffer ETFs also cap their upside potential. So, if the market soars, the fund will only capture a percentage of that gain. It's a trade-off: limited sunshine for guaranteed cover during rain.


Of course, buffer ETFs aren't a magic bullet. Their complexities require careful research. Fees, the specific buffer and cap levels, and the underlying index all affect their performance. As popular as the concept has become in recent years, more than 200 of these funds now exist offering a wide range of features. For advisors looking for a way to offer their clients downside protection, buffer ETFs are worth a look.

Finsum: A new category of exchange traded funds, buffer ETFs, has been growing in popularity due to their downside protection and ability to share in upside gains.


Published in Wealth Management

Financial advisors and investors seem to be speaking different languages when it comes to annuities. A recent survey paints a curious picture: while only 19% of financial professionals perceive client interest in guaranteed lifetime income products, nearly half of the surveyed investors nearing or in retirement express the same desire. This disconnect presents an opportunity for advisors to revisit the conversation and unlock significant value for their clients.


For investors approaching their golden years, the fear of market volatility and portfolio depletion is real. They seek peace of mind, knowing a portion of their income is secure, regardless of economic turbulence. Despite their complexities, annuities offer this very protection, guaranteeing regular payouts throughout retirement.


The conversation around annuities requires reframing. It's not about sacrificing growth for a fixed income stream, but about building a holistic retirement plan that balances potential future returns with guaranteed income that alleviates anxiety and fosters financial security. Advisors who bridge this gap and proactively discuss lifetime income options with their clients stand to forge deeper trust and build stronger, more enduring relationships.

Finsum: Financial professionals may underestimate their client’s interest in guaranteed lifetime income options.


Published in Wealth Management
Wednesday, 06 December 2023 02:34

What are investors looking for in an annuity?

Based on the most recent annuity sales data, it's a good bet they are seeking a combination of growth and protection. According to LIMRA, the financial services research and education organization, sales of registered indexed-linked annuities (RILAs) set a record in the third quarter of 2023 at $12.6 billion, up 19% year-over-year.

In a recent posting on the organization's website, Todd Giesing, assistant vice president LIMRA Annuity Research, stated that "Investors still seem focused on the value of protection and growth potential that RILAs offer."

And while RILA sales set a record, the overall annuity market is also having a good year. In the news release for their most recent U.S. Individual Annuity Sales Survey, LIMRA reported that "With economic conditions continuing to be favorable for annuities, total sales increased 11% year-over-year to $89.4 billion in the third quarter of 2023."

One additional highlight from the survey is worth noting. Fixed indexed annuity (FIA) sales were $23.3 billion in the third quarter, up 9% from the prior year's results.

Finsum: LIMRA reports registered indexed-linked annuities sales, reflecting a strong investor preference for investment growth and protection.


Published in Wealth Management
Wednesday, 16 August 2023 04:34

Risk not your mojo?

Save the risky business for the movies.

With little risk linked to it, active fixed income is one reason investors are attracted to it, according to assetnvesting.net.

What’s the scoop here? Well, it guarantees the capital of investors and reduces --  and not just a little – the insecurity that it can dispense in the event that if, for one thing, an equity investment’s opted for.

It doesn’t stop there. Additionally, the fixed income shells out a return. While it might not be robust when weighed against other investments, it boasts a reputation ahead of time. That matters since, because of it, investors are positioned to previously know the results it will secure. For conservative investors, it’s what they opt for first.

And talk about versatility. Tactical responses to a cocktail of market climates and shifts in regimes are facilitated by an active approach, according to troweprice.com. On top of that, it dishes out the flexibility to leverage pricing anomalies and dislocations that a volatile climate might generate. Additionally, curve positioning could be a good idea to mull.

Category: Eq: Market, 

Keywords: active, investors... etc.

Published in Eq: Total Market
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