Print  Save Email | Text A A A |
  Do You Recommend This Article?  

FAs Reconsidering Annuities Amid Covid-19 Volatility: Cerulli

By Alex Padalka August 13, 2020

The market volatility accompanying the coronavirus pandemic is causing financial advisors to reconsider the guaranteed income feature of annuities, according to a recent report. 

“Framing annuities as a type of pension or Social Security payout (e.g., defined benefit) could be an effective tactic to explain their attributes to clients,” Donnie Ethier, director of wealth management at Cerulli, says in a statement.

Ethier says pensions and guaranteed payouts may be particularly attractive to clients such as small business owners, as many of them are relying on coronavirus financial assistance programs such as the Paycheck Protection Program and Small Business Administration loans.

Furthermore, advisors may become increasingly interested in variable annuities in order to mitigate portfolio risk as equity markets seesaw, according to Cerulli. Some advisors tell the research firm that they’re able to explain to clients that buying VAs is a form of downside protection, Cerulli says. 

Nevertheless, advisors will have to overcome the negative perceptions about annuities among investors, 79% of whom cite high fees as a concern about the product, according to the report. In addition, 37% of investors believe there are more efficient options for ensuring retirement income, Cerulli says. 

That said, Cerulli’s survey of affluent households found that they’re looking for guaranteed income and diversification of their portfolios.

“It’s highly likely that investors are more focused than ever on protecting their hard-earned savings than at any other point during the past decade,” Ethier says in the statement.

Do you have a news tip you’d like to share with FA-IQ? Email us at

Print  Save Email | Text A A A |
  Do You Recommend This Article?  
Tags:  Investment strategies , Retirement planning , Portfolio management , Cerulli

Comment or Feedback

* Required
Financial Advisor IQ will send a confirmation email to your registered email address.