Three in four advisers believe their clients would consider US-style annuities ahead of traditional annuities, but many fear they do not know enough about the products available.
According to research commissioned by Lincoln Financial Group, which offers life assurance, pensions and unit trusts, 74% of advisers think their customers would welcome the choice of US-style annuities when considering retirement income plans, with only 5% saying clients would not consider them.
However, 46% of advisers polled felt that the complexity of the products was a major weakness, and another 46% thought they produce lower incomes compared to traditional annuities and drawdown products.
Lincoln Financial commissioned the research as it enters the UK retirement market with the launch of Lincoln i2Live, a flexible product designed to take clients through each stage of retirement planning.
Head of product and marketing at Lincoln Retirement Income, Simon O’Connor, says: “The market needs innovative solutions to help clients plan for retirement and the option of flexibility with a level of guarantee will meet the needs of many clients disillusioned with traditional annuities.”
O’Connor also says there is a need for providers and advisers to ensure customers fully understand the range of options available.
The research revealed 56% of financial advisers believe customers only have a limited understanding of annuities, and 16% believe consumers have no understanding of annuities.
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