Fifty-five percent of advisors whose clients typically have less than $500,000 investable assets believe annuity products should be included as part of their financial portfolios, according to a recent Life Insurance Marketing and Research Association (LIMRA) study.

"Our study found that the majority of advisors feel longevity-outliving their assets-to be the greatest risk facing their clients," said Matthew Drinkwater, the associate managing director for LIMRA’s retirement research.  "This is particularly true for less affluent households, who often must rely on their personal savings to generate retirement income and do not have enough assets to self-insure against longevity risk."

The proportion of advisors who believe the benefits of guaranteed income products outweighed the benefits of non-guaranteed income solutions rose 16 percent since 2009, to 56 percent from 40 percent. LIMRA attributes advisors’ growing acceptance of guaranteed income solutions in part to product development and better communication about the value proposition by insurers.

In addition, six in 10 advisors say guaranteed income solutions, like annuities, are well received by their clients. Nearly half of advisors said guaranteed income solutions should be used to cover non-discretionary expenses, up 10 percentage points from 2009. 

The study also found that forty-two percent of advisors feel these guaranteed income products like annuities are suitable for their wealthier clients as well. 

"The past few years of market volatility have demonstrated the importance of guaranteed income in retirement," noted Alison Salka, LIMRA corporate vice president and director of LIMRA’s retirement research. "As a result, more advisors are integrating guaranteed income solutions, like annuities, into their clients’ financial portfolios. However, advisors say they need training and support from insurers. Companies that engage wholesalers and others to provide these services will be more successful attracting advisors to sell their products."