Where Do you Go for Financial Advice?
Going into 2013 from 2012, the institute expects to see a decline in defined benefit (DB) plans, increasing retirement assets in individually managed accounts and uncertainty about the future of Social Security and Medicare. External challenges include historically low interest rates, market volatility, cost of capital in providing annuities and regulatory issues.In 2013, the institute says to watch out for the preservation of tax-deferred status of retirement savings and the prevention of tax increases, particularly on the middle class; the re-proposed fiduciary standard applied to advisors of employment-based retirement plans; and investor behavior driven by market volatility and desire for guarantees.Companies are innovating with new products and are expanding into new markets and new players are entering the market. At least six companies currently offer a DIA, or have filed to offer the product in 2013. Many new products and benefits are falling into one of three market segments: income now, income later and unknown income needs. Annuity providers are seeking to balance product design to manage longevity, market and client behavior risks while in an economic environment of continued low interest rates and high market volatility.While some companies have slowed down or eliminated new annuity sales, private equity firms are entering the annuity market by purchasing interests in fixed-indexed companies as well as variable annuity blocks.The report is here.