Survey: Three in four financial professionals say annuities help them retain clients

Columbus, OH – Financial professionals have long understood the value of annuities when it comes to protecting their clients’ assets and generating retirement income. Now, they’re discovering another benefit – annuities are helping them create long-lasting client relationships.

According to recent survey results from Nationwide, 73% of financial professionals who sell annuities believe they help them retain clients. Additionally, 81% of those with higher production – those who have sold at least 10 annuities in the last 24 months – feel they make their client relationships “stickier.”

“It’s no surprise financial professionals are leveraging annuities in client portfolios as evidenced by another record-breaking year of sales in the annuity industry,” said Rona Guymon, senior vice president of Nationwide Annuity Distribution. “What might be unexpected to some is the long-term relationship that can be built with clients as a result of an annuity purchase. We know annuities are complex investment vehicles that sometimes require more explanation and guidance than other solutions. This presents an opportunity for financial professionals to connect with their clients on a deeper level, driving conversations to understand their long-term goals as they work together to build a holistic plan. These interactions can set the stage for a more meaningful and trusting relationship – one that even has the potential to expand to the next generation as advisors work with annuity owners’ heirs.”

Annuity misinformation, external factors pose challenges for financial professionals
In addition to helping them build long-lasting relationships, financial professionals recognize the value of annuities’ key benefits in helping their clients prepare for retirement – especially in today’s turbulent market environment. Ninety-one percent agree that annuities help their clients protect against market volatility, and 86% say they help them diversify portfolios.  

While the benefits of including annuities in holistic plans are clear, financial professionals are still facing challenges incorporating them into client portfolios. Although 27% of their clients own at least one annuity, financial professionals across all distribution channels (broker dealer, wirehouse and registered investment advisor) say they would prefer 38% have one or more annuities in their portfolio – but are deterred from reaching this goal by a number of obstacles.

Clients’ perceptions that annuities are overwhelming (60%) and external factors like TV, radio and podcast shows that diminish annuity appeal (54%) pose challenges for financial professionals as they work to educate clients. Additionally, 78% said clients have negative annuity preconceptions.

“Because there is so much information out there about the benefits and drawbacks of annuities, it’s understandable why some clients might find them confusing or come into a conversation with an incorrect understanding of how they work,” Guymon said. “While it’s fair for commentators to discuss why annuities might not be right for every investor, some investors may interpret that as meaning they are not right for any investor – which is not true. It’s important to stick to fact-based messages with clients to dispel misinformation, helping to break down common myths so they can understand how annuities might fit with their specific needs and goals.”  

Building trust through educational conversations
In order to effectively sell annuities, break down misconceptions and build trusting relationships with their clients, financial professionals say they are turning to annuity carriers for help – specifically when it comes to materials they can use to educate their clients. Fifty-four percent said they are seeking client-facing materials on annuities as a source of guaranteed income, and 43% said they want more on annuities’ role in an overall financial plan.

“Financial professionals should lean on annuity providers for help educating clients on the role annuities can play in their portfolios,” Guymon said.

The Nationwide Retirement Institute offers access to planning tools and consultative support that financial professionals can use to help break down topics like annuities with their clients, helping to build a trusted and lasting relationship.

About Nationwide’s Annuity Financial Professional Survey
The research was conducted online within the U.S. by Nationwide Mutual Insurance Company and Zeldis Research from September 5-24, 2024, among 504 financial professional respondents. Respondents had to be annuity-producing financial professionals with at least three years of experience as a financial professional.