LOUISVILLE, Ky., September 30, 2021–(BUSINESS WIRE)–DPL Monetary Companions (“DPL”), the main turnkey insurance coverage platform for registered funding advisors (“RIAs”), launched the outcomes of its annual RIA Retirement Planning Survey, which discovered many advisors nonetheless attempting to adapt their practices to the realities of this period of low rates of interest. Whereas many are scuffling with elevated danger in consumer portfolios and the challenges of billing AUM charges on low yielding property, a rising variety of their friends embrace the earnings and draw back safety options supplied by annuities to unravel these issues. The survey, which polled greater than 200 RIAs, measured advisors’ retirement planning attitudes and practices, their understanding of purchasers’ retirement earnings issues & priorities, and their methods for assembly consumer earnings wants.
The survey uncovered two elements that could possibly be propelling advisors to up the share of consumer portfolios allotted to riskier asset courses: a rising dissatisfaction with their fastened earnings returns, and the truth that a good portion of advisors are charging decrease charges—or no charges—on fastened earnings property.
“Regardless that the survey revealed a rising belief in annuities, numerous advisors nonetheless over-allocate to equities and depend on riskier, investments-only methods for earnings,” mentioned DPL CEO and Founder David Lau. “Given this period of low rates of interest and anemic fastened earnings, advisors have to replace their approaches to satisfy consumer wants with out exposing them to pointless dangers in retirement. With a lot of their conventional investing instruments now not serving their conventional functions, and with the standard and breadth of Fee-Free merchandise available in the present day, there aren’t any excuses for advisors to not leverage these merchandise for his or her purchasers.”
Different findings from the survey embrace:
Over 70% of respondents have been dissatisfied or very dissatisfied with fastened earnings returns, a rise of virtually 15% from the earlier yr.
38% of advisors are billing purchasers a decreased charge or no charge in any respect on fastened earnings.
57% indicated they’ve been allocating extra closely to dividend-paying shares (versus 46% in 2019) and 22% are utilizing riskier credit score investments (versus 17% in 2019) to fund earnings for purchasers.
When requested in the event that they would favor an annuity that pays 6% assured earnings for all times (internet of charges), whereas retaining money worth (till depleted by withdrawals) or a bond portfolio yielding 1.5%, the huge mainity of respondents mentioned they might take the annuity (up 13% over 2020).
Buying an earnings producing annuity in response to purchasers’ decreased danger tolerance has develop into extra widespread; the p.c of respondents selecting this feature elevated from 9% to 22% since 2020.
The RIA Retirement Planning Survey Govt Abstract and Key Findings is accessible right here.
About DPL Monetary Companions
DPL Monetary Companions is the primary and main RIA turnkey insurance coverage administration platform that brings commission-free insurance coverage options from quite a lot of the nation’s prime carriers to RIA practices. DPL has created a market of commission-free insurance coverage merchandise that allows RIAs to include insurance coverage and annuities into their practices to extra holistically serve their purchasers. Purchasers profit from merchandise that provide aggressive pricing and fiduciary implementation fairly than commissioned, sales-driven ones. www.dplfp.com
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Greg Joslyn, The Lowe Group