NFP Advisor Services Group Publishes Aite Study on Guaranteed Income

NEW YORK, Aug. 8, 2012 /PRNewswire/ -- NFP Advisor Services Group today published the results of a study that assesses independent financial advisors' current position on guaranteed income as its own unique asset class and details their present and potential uses of the product. NFP Advisor Services Group offers broker/dealer and asset management products and services to financial advisors, including RIAs and hybrid advisors, and is a business segment of National Financial Partners Corp. (NYSE: NFP), a leading provider of benefits, insurance and wealth management services.

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James Poer, President of NFP Advisor Services Group, said, "To attract and retain clients, advisors must keep up with the dynamic, ever-changing investment environment. One of our goals is to be at the forefront of that change, providing advisors with unique insights and innovative solutions to help them stay ahead of the curve with their clients. This study clearly indicates that the appeal and practicality of guaranteed income investments is rising, and we are pleased to be able to provide additional insight on this topic."

The study, commissioned by NFP Advisor Services Group, and produced by leading independent research firm Aite Group, utilized a 360 degree approach including perspectives from investors, independent advisors and leading insurance carrier executives. It explores the gap between consumer need and advisor utilization. Some of the points found in the study are:

• In 2010, 48% of all U.S. households indicated an interest in products that provide guaranteed income for life. Investors are willing to accept a low rate of return for such protection.

• Consumer Survey Respondents were willing to pay between 4 – 6 % of assets to guarantee they wouldn't run out of money in retirement.¹

• Yet financial advisors affiliated with an independent registered investment advisor only recommend guarantees 49% of the time and financial advisors affiliated with an independent broker/dealer only recommend them 69% of the time when clients are facing longevity risks.

• Academic research of Peng Chen, Moshe Milevsky and others indicated that income guarantees have delivered higher returns and reduced shortfall income risk levels while addressing sequence of return, investment and longevity risk factors for clients.    

Retirement income portfolios exist for a reason – to provide income over a lifetime, which can strain many portfolios lasting more than 30 years. Uncertainty, rising medical costs and sequence-of-risk returns require advisors to be open to exploring solutions in the clients' best interests. Guaranteed income solutions represent a missed opportunity and deserve serious consideration from advisors.

Poer concludes, "Clients are intrigued by guaranteed income and they're willing to pay for it. Academic research says their interest is justified. The right guaranteed income products at the right price in the right portfolio can improve your ability to boost clients' retirement security, and this is something advisors should consider when helping clients plan for retirement."

View the complete results of the study here www.nfpasg.com/guaranteedincome

About the Study
Aite Group's independent study – The Missed Opportunity: Guaranteed Income as an Asset Class" utilized perspectives from investors, independent advisors and leading insurance carrier senior executives. Leading academics and industry thought-leaders were also consulted. The analysis also leverages publicly-available information.

This white paper is also based on a March 2012 Aite Group online survey of 248 independent financial advisors. The sample is a composite of three groups of financial advisors: financial advisors affiliated with an insurance broker/dealer, financial advisors affiliated with an independent broker/dealer and financial advisors affiliated with an independent RIA. These data have a 5-point margin of error at the 90% level of confidence.

¹2007 Alliance Bernstein / Insurance Retirement Institute Study

About NFP Advisor Services Group
NFP Advisor Services Group, a business segment of NFP, serves independent financial advisors whose clients include high net worth individuals and companies by offering broker/dealer and asset management products and services through NFP subsidiaries, NFP Securities, Inc., member FINRA/SIPC, and NFP IndeSuite, Inc. NFP Advisor Services Group attracts financial advisors seeking to provide clients with sophisticated resources and an open choice of products.

About NFP
National Financial Partners Corp. (NYSE: NFP), and its benefits, insurance and wealth management businesses provide diversified advisory and brokerage services to companies and high net worth individuals, partnering with them to preserve their assets and prosper over the long term. NFP advisors provide innovative and comprehensive solutions, backed by NFP's national scale and resources. NFP operates in three business segments. The Corporate Client Group provides corporate and executive benefits, retirement plans and property and casualty insurance. The Individual Client Group includes retail and wholesale life insurance brokerage and wealth management advisory services. The Advisor Services Group serves independent financial advisors by offering broker/dealer and asset management products and services. Most recently NFP was ranked eighth on Business Insurance's 100 Largest Brokers of U.S. Business; as the ninth Top Global Insurance Broker by Best's Review; operated the fourth largest Executive Benefits Provider of nonqualified deferred compensation plans administered for recordkeeping clients as ranked by PlanSponsor; operated a top ten Independent Broker Dealer as ranked by Investment Advisor; had three advisors ranked in Barron's Top 100 Independent Financial Advisors and is a leading independent life insurance distributor according to many top-tier carriers.  For more information, visit www.nfp.com.

About Aite
Aite Group is an independent research and advisory firm focused on business, technology, and regulatory issues and their impact on the financial services industry. With expertise in banking, payments, securities & investments, and insurance, Aite Group's analysts deliver comprehensive, actionable advice to key market participants in financial services. Headquartered in Boston with a presence in Chicago, New York, San Francisco, London, and Milan, Aite Group works with its clients as a partner, advisor, and catalyst, challenging their basic assumptions and ensuring they remain at the forefront of industry trends.

SOURCE NFP Advisor Services Group