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Impact of Annuity Usage Survey, 2023

DPL Financial Partners
October 17. 2023

The financial advising profession continues to evolve with a growing focus on more holistic planning. This change requires financial advisors to become familiar with an increasingly complex array of financial products and strategies. Annuities are one product that has notably different interest and usage across financial advisors today. There are a variety of potential explanations for this, such as the dizzying array of product structures, varying levels of product quality, as well as the traditional commissioned structure to name a few. At their core, though, annuities have the potential to provide something a more traditional portfolio cannot: income that is protected for life.

Following are the findings of a new survey conducted by DPL Financial Partners among 398 financial advisors exploring perceptions around the value of using annuities with clients. This is a relatively novel sample, since over 90% of respondents are RIAs, a group which has historically been generally averse to annuities.

The survey reveals that lack of knowledge (or familiarity) with annuities could be driving lack of adoption, since financial advisors who are more familiar with annuities have notably better attitudes towards annuities, perceive higher interest from clients, and are more likely to recommend them.

Additionally, the results suggest that there are not only benefits related to client relationships and client behaviors from purchasing annuities, but also that advisors who recommend annuities have experienced positive effects on firm revenue and expected long- term value, on average (especially among those advisors who are most familiar with annuities).

These benefits are remarkable and suggest annuities can be used not just as another arrow, but a whole new quiver, for financial advisors to expand their practices while delivering important economic and behavioral benefits to clients.

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